Kuwait financial sector may draw money launderers: IMF

DUBAI: Rapid growth of Kuwait's financial sector could create an attractive environment for money launderers , International Monetary Fund said in a report.

"Although there is currently no evidence of significant money-laundering in the country, Kuwait's financial sector is growing rapidly in terms of banking sector assets," IMF said

"This development has the potential of creating a suitable environment for money launderers to exploit," it said.

The OPEC member has introduced an anti-money laundering law in 2002 regulating financial institutions.

Banking assets in Kuwait almost doubled over the past five years to 42.1 billion dinars ($154.5 billion) at the end of June, the central bank's data showed.

The IMF also said Kuwait's anti-money laundering framework showed weaknesses in the preventive measures for financial institutions and a lack of supervision and monitoring.

The Gulf Arab state has long been urged to better regulate its financial markets and boost transparency and governance among investment firms. Kuwait's first ever market regulator, the Capital Markets Authority, was launched in March.

The IMF also said the powers of enforcement and sanction against financial institutions were not appropriate, and that the country needed to take a more proactive approach to investigating and prosecuting money laundering.

Copyright Reuters, 2011