Skip to main content

Advertisement

SpringerLink
Log in

‘Indirect Method of Proof’ and the Kuwaiti Anti-Money Laundering Law: A Lesson from the UK

  • Published:
Criminal Law Forum Aims and scope Submit manuscript

Abstract

The money laundering offence (ML offence), as established by the Kuwaiti Anti-Money Laundering and Countering Financing of Terrorism Act 106/2013 (“AML/CFT Act”), has the potential to combat financial crimes. The broad definition of ‘proceeds of crime’ and the ‘all crimes’ approach adopted in the AML/CFT Act are two features that help the ML offence to do so. In relation to Kuwait, where the problem of public corruption is a common, prevalent pattern of criminality, the ML offence becomes of paramount importance. Corruption can be effectively combated by the ML offence. Using the indirect method of proof, the ‘stand-alone’ ML offence can do the trick. Yet, the ML offence is underused by Kuwaiti practitioners; it is used as a secondary, additional charge. In this context, this paper builds on public policy work on ‘policy transfer’ and argues that rather than being a rational response to a real problem, the AML/CFT Act has been transferred to Kuwait based on a ‘coercive transfer’, and that process is responsible for the misapplication and misunderstanding among Kuwaiti practitioners of the AML law. To that end, the Kuwaiti law enforcement authorities, prosecutors, and judges should reconsider their understanding and implementation of the existing AML law, and effectively harness the role of the ML offence in counter-corruption function. This paper’s thesis is a feasible one. Instead of calling for legislating for new laws, which may be stunted by broader political factors, this paper argues for employing existing legal instruments.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

Notes

  1. Peter Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime (Hart Publishing, 2003), 2.

  2. See Khaled S. Al-Rashidi, Combating Corruption in the Middle East: A Socio-Legal Study of Kuwait (Routledge, 2021).

  3. See Khaled S. Al-Rashidi, ‘Proceeds of Corruption Crime: The Kuwaiti Legal Response’ in Katie Benson, Colin King and Clive Walker (eds.), Assets, Crimes and the State: Innovation in 21st Century Legal Responses (Routledge, 2020).

  4. Paul Heywood, ‘Introduction: Scale and Focus in the Study of Corruption’ in Paul Heywood (ed.), Routledge Handbook of Political Corruption (Routledge, 2015).

  5. See Michael Johnston, 'The Definitions Debate: Old Conflicts in New Guises' in Arvind Jain (ed.), The Political Economy of Corruption (Routledge, 2001).

  6. See World Bank, Helping Countries Combat Corruption: The Role of the World Bank (World Bank, 1997), 8.

  7. See the CPI 2019, available at <https://www.transparency.org/en/cpi/2019/results> accessed 17 January 2021.

  8. See Al-Rashidi, 'Proceeds of Corruption Crime: The Kuwaiti Legal Response' supra note 3.

  9. See Al-Rashidi, Combating Corruption in the Middle East: A Socio-Legal Study of Kuwait supra note 2.

  10. See Ahmad Al-Melhem, 'Kuwait: Law on the Protection of Public Funds', Journal of Financial Crime 3 (1995).

  11. Nazaha, Kuwait Integrity and Anti-Corruption Strategy 2019–2024 (Nazaha, 2019).

  12. See the PPFA.

  13. See CLA 1960.

  14. See CLA 1970.

  15. See AML/CFT Act.

  16. See ACAA.

  17. See GCC Common Customs Act 10/2003.

  18. See Income Tax Act 3/1955.

  19. See Competition Protection Act 72/2020, repealing 10/2007 Act.

  20. See s. 2 of the ACAA.

  21. Peter Reuter and Edwin Truman, Chasing Dirty Money: The Fight against Money Laundering (Institute for International Economics, 2004), 40.

  22. See David Chaikin and Jason Sharman, Corruption and Money Laundering: A Symbiotic Relationship (Palgrave Macmillan, 2009); FATF, The Use of FATF Recommendations to Combat Corruption (FATF, 2013).

  23. FATF, Laundering the Proceeds of Corruption (FATF, 2011), 6.

  24. Ibid.

  25. See Al-Rashidi, 'Proceeds of Corruption Crime: The Kuwaiti Legal Response' supra note 3.

  26. MENAFATF, Mutual Evaluation Report: 3rd Follow-Up Report for State of Kuwait: Anti-Money Laundering and Combating the Financing of Terrorism (MENAFATF, 2015).

  27. Peter Alldridge, 'Money Laundering and Globalization', Journal of Law and Society, 35 (2008), 442.

  28. M Michelle Gallant, 'Money Laundering Consequences: Recovering Wealth, Piercing Secrecy, Disrupting Tax havens and Distorting International Law', Journal of Money Laundering Control, 17 (2014).

  29. Asim Jusic, 'Kuwait’s Administrative Risk-based Model for the Prevention of Money Laundering: Costs and Benefits of Compliance with the Financial Action Task Force (FATF) Standards', Arab Law Quarterly, 31 (2017).

  30. Petrus Van Duyne, Jackie Harvey and Liliya Gelemerova, The Critical Handbook of Money Laundering: Policy, Analysis and Myths (Palgrave Macmillan, 2018).

  31. AML/CFT Act, s. 1.

  32. KFIU, 'Corruption Relevant Indicators', available at <https://www.kwfiu.gov.kw/Webpage/PUBLICATIONs/Filedownload/39?DocumentType=Publication> 2 accessed 17 January 2021.

  33. Edward Rees, Richard Fisher and Richard Thomas, Blackstone's Guide to the Proceeds of Crime Act 2002 (5th edn, Oxford University Press, 2015).

  34. FATF, The Use of FATF Recommendations to Combat Corruption supra note 22.

  35. Ibid.

  36. Mark Pieth, 'International Standards against Money Laundering' in Mark Pieth and Gemma Aiolfi (eds.), A Comparative Guide to Anti-Money Laundering: A Critical Analysis of Systems in Singapore, Switzerland, the UK and the USA (Edward Elgar, 2004), 16.

  37. Michael Levi and Peter Reuter, 'Money Laundering', Crime and Justice, 34 (2006).

  38. John Hatchard, Combating Corruption: Legal Approaches to Supporting Good Governance and Integrity in Africa (Edward Elgar, 2014).

  39. John Madinger, Money Laundering: A Guide for Criminal Investigators (CRC Press, 2012).

  40. Mariano-Florentino Cuéllar, 'The Tenuous Relationship Between the Fight against Money Laundering and the Disruption of Criminal Finance', Journal of Criminal Law and Criminology, 93 (2002), 341.

  41. Rees, Fisher and Thomas, supra note 33; Levi and Reuter, supra note 37.

  42. Levi and Reuter, supra note 37.

  43. FATF, Laundering the Proceeds of Corruption supra note 23.

  44. AML/CFT Act, s. 2.

  45. Van Duyne, Harvey and Gelemerova, supra note 30, 172.

  46. AML/CFT Act, s. 2

  47. MENAFATF, supra note 26, 22.

  48. Rees, Fisher and Thomas, supra note 33.

  49. See Edward Hoseah, Corruption in Tanzania: The Case for Circumstantial Evidence (Cambria Press, 2008).

  50. Al-Rashidi, Combating Corruption in the Middle East: A Socio-Legal Study of Kuwait supra note 2.

  51. Ibid.

  52. Peter Alldridge, What Went Wrong with Money Laundering Law? (Springer, 2016), 2.

  53. David Dolowitz and David Marsh, 'Learning from Abroad: The Role of Policy Transfer in Contemporary Policy-making' Governance, 13 (2000), 14.

  54. Colin Bennett and Michael Howlett, 'The Lessons of Learning: Reconciling Theories of Policy Learning and Policy Change', Policy Sciences, 25 (1992).

  55. Dolowitz and Marsh, supra note 53, 15.

  56. Jason C. Sharman, 'Power and Discourse in Policy Diffusion: Anti‐Money Laundering in Developing States', International Studies Quarterly, 52 (2008), 635.

  57. Ibid.

  58. Van Duyne, Harvey and Gelemerova, supra note 30.

  59. MENAFATF, Mutual Evaluation - Anti-Money Laundering and Combating the Financing of Terrorism: State of Kuwait (FATF, 2011), 9.

  60. MENAFATF, Mutual Evaluation Report: 3rd Follow-Up Report for State of Kuwait: Anti-Money Laundering and Combating the Financing of Terrorism supra note 26.

  61. US Department of State’s International Narcotics Control Strategy Report, Money Laundering and Financial Crimes Country Database (US Department of State, 2015), 249.

  62. See RE Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions', Journal of Money Laundering Control, 4 (2000).

  63. For a brief history of the situation before POCA, see Vivian Walters, 'Prosecuting Money Launderers: Do the Prosecution Have to Prove the Predicate Offence?', Criminal Law Review, (2009).

  64. RE Bell, 'Abolishing the Concept of ‘Predicate Offence’', Journal of Money Laundering Control, 6 (2003).

  65. David McCluskey, 'Money Laundering: The Disappearing Predicate', Criminal Law Review, (2009), 719.

  66. See Zaiton Hamin et al., 'Configuring Criminal Proceeds in Money Laundering Cases in the UK', Journal of Money Laundering Control, 17 (2014).

  67. See Walters, supra note 63, 573.

  68. David Ormerod, 'Money Laundering: Proceeds of Crime Act 2002 s.340 - “Criminal Conduct"', Criminal Law Review, (2008).

  69. David Bentley and R Fisher, 'Criminal Property under POCA 2002 – Time to Clean up the Law?', Archbold News, 2 (2009), 8.

  70. See Fiscal Information and Investigation Service of the Netherlands, Indirect Method of Proof: Providing Evidence in Stand-alone Money Laundering Investigations (FIOD, 2019).

  71. See Madinger, supra note 39, 109.

  72. See Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62.

  73. See Hamin et al., supra note 66.

  74. See Basel Institute on Governance, Tracing Illegal Assets - A Practitioner’s Guide (Basel Institute on Governance, International Centre for Asset Recovery, 2015).

  75. Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime supra note 1, 67.

  76. Madinger, supra note 39.

  77. Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62, 12.

  78. CPS, 'Proceeds Of Crime Act 2002 Part 7 - Money Laundering Offences', 1 March 2018, available at <https://www.cps.gov.uk/legal-guidance/proceeds-crime-act-2002-part-7-money-laundering-offences> accessed 17 January 2021.

  79. Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62.

  80. Chaikin and Sharman, supra note 22.

  81. Drugs Trafficking Acts and Criminal Justice Act 1993.

  82. See Walters, supra note 63; Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62.

  83. Guy Stessens, Money Laundering: A New International Law Enforcement Model (Cambridge University Press, 2000).

  84. See Karen Harrison and Nicholas Ryder, The Law Relating to Financial Crime in the United Kingdom (Ashgate, 2013), 18–22.

  85. Fiscal Information and Investigation Service of the Netherlands, supra note 70.

  86. See Al-Rashidi, 'Proceeds of Corruption Crime: The Kuwaiti Legal Response' supra note 3.

  87. Al-Rashidi, Combating Corruption in the Middle East: A Socio-Legal Study of Kuwait supra note 2.

  88. Case No. 1325/2016, dated 22/5/2017 (Criminal Division 2).

  89. Al-Rashidi, Combating Corruption in the Middle East: A Socio-Legal Study of Kuwait supra note 2.

  90. Ibid.

  91. Mary Michelle Gallant, 'Alberta and Ontario: Civilizing the Money-Centered Model of Crime Control', Asper Review of International Business and Trade Law, 4 (2004), 16.

  92. Fiscal Information and Investigation Service of the Netherlands, supra note 70, 23.

  93. See Alldridge, 'Money Laundering and Globalization' supra note 27.

  94. Van Duyne, Harvey and Gelemerova, supra note 30.

  95. UNODC, UN Guide for Anti-Corruption Policies (UN, 2003), 80.

  96. Levi and Reuter, supra note 37.

  97. RE Bell, 'Prosecuting the Money Launderers Who Act for Organised Crime', Journal of Money Laundering Control, 3 (1999); Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62.

  98. Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime supra note 1.

  99. For an analysis about the threats to this principle, see Andrew Ashworth, 'Four Threats to the Presumption of Innocence', International Journal of Evidence and Proof, 10 (2006).

  100. See, in general, Bentley and Fisher, supra note 69.

  101. Ormerod, supra note 68; McCluskey, supra note 65.

  102. Dan Wilsher, 'Inexplicable Wealth and Illicit Enrichment of Public Officials: A Model Draft that Respects Human Rights in Corruption Cases', Crime, Law and Social Change, 45 (2006).

  103. Lindy Muzila et al., On the Take: Criminalizing Illicit Enrichment to Fight Corruption (World Bank, 2012).

  104. Christian Gruenberg, Corruption and Human Rights: Integrating Human Rights into the Anti-Corruption Agenda (International Council on Human Rights Policy, 2009), 53.

  105. Case No. 4/2017, 8/11/2017 (Constitutional Court).

  106. Ian H. Dennis, The Law of Evidence (4th edn, Sweet & Maxwell, 2010).

  107. Ashworth, supra note 99, 269.

  108. Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime supra note 1, 67.

  109. Bell, 'Proving the Criminal Origin of Property in Money‐Laundering Prosecutions' supra note 62, 12.

  110. The Guardian, '1MDB Trial: Former PM Najib Razak Takes Stand for First Time over Corruption Charges', 3 Dec 2019, available at <https://www.theguardian.com/world/2019/dec/03/1mdb-trial-former-pm-najib-razak-takes-stand-for-first-time-over-corruption-charges> accessed 17 January 2021; US Department of Justice, 'United States Reaches Settlement to Recover More Than $700 Million in Assets Allegedly Traceable to Corruption Involving Malaysian Sovereign Wealth Fund', 30 October 2019, available at <https://www.justice.gov/opa/pr/united-states-reaches-settlement-recover-more-700-million-assets-allegedly-traceable> accessed 17 January 2021.

  111. Sarawak Report, 'How China & Kuwait Funnelled 1MDB Kickbacks To Pay Jho's Low's Top US/UK Law Firms EXCLUSIVE', 6 May 2020, available at <https://www.sarawakreport.org/2020/05/how-china-kuwait-funnelled-1mdb-kickbacks-to-pay-jhos-lows-top-usuk-law-firms-exclusive/> accessed 17 January 2021.

  112. See Ibid.

  113. Sarawak Report, ‘How Jho Low Created A New Front For 1MDB Kickbacks In Kuwait EXCLUSIVE', 9 May 2020, available at <https://www.sarawakreport.org/2020/05/how-jho-low-created-a-new-front-for-1mdb-kickbacks-in-kuwait-exclusive/> accessed 17 January 2021.

  114. Sarawak Report, 'How China & Kuwait Funnelled 1MDB Kickbacks To Pay Jho's Low's Top US/UK Law Firms EXCLUSIVE' supra note 111.

  115. Kuwait News Agency, 'Cabinet Reviews Alleged Corruption between Local Firm and Overseas Firms, Officials', 20 May 2020, available at <https://www.kuna.net.kw/ArticleDetails.aspx?id=2895729> accessed 17 January 2021.

  116. Sarawak Report, 'How China & Kuwait Funnelled 1MDB Kickbacks To Pay Jho's Low's Top US/UK Law Firms EXCLUSIVE' supra note 111.

  117. For further analysis about the rationales for the fight against ML, see Stessens, supra note 83.

  118. Pieth, supra note 36.

  119. Madinger, supra note 39.

  120. Bell, 'Abolishing the Concept of ‘Predicate Offence’' supra note 64.

  121. Alldridge, 'Money Laundering and Globalization' supra note 27, 457.

  122. Gruenberg, supra note 104.

Acknowledgements

The author would like to thank Professor Emeritus Clive Walker (University of Leeds) and the two anonymous reviewers for their very helpful comments on an earlier draft of this article.

Funding

This study is not funded.

Conflict of interest

The author declares that he has no conflict of interest.

Author contributions

The author is the only contributor to this article.

Author information

Authors and Affiliations

  1. School of Law, Kuwait University, Shuwaikh Educational, Kuwait

    Khaled S. Al-Rashidi

Authors
  1. Khaled S. Al-Rashidi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Khaled S. Al-Rashidi.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Khaled S. Al-Rashidi, Assistant Professor at School of Law, Kuwait University, Shuwaikh Educational, Kuwait. e-mail: khaled.alrashidi2@ku.edu.kw.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Al-Rashidi, K.S. ‘Indirect Method of Proof’ and the Kuwaiti Anti-Money Laundering Law: A Lesson from the UK. Crim Law Forum 32, 405–433 (2021). https://doi.org/10.1007/s10609-021-09415-3

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10609-021-09415-3

Search

Navigation