Charity organizations are now required by CBK to submit a detailed report of all transfer transactions on a monthly basis.
In a significant move towards modernizing its charity sector, Kuwait has announced new regulations for charity transfers that prioritize enhanced transparency, stricter reporting requirements, and compliance with international standards.
The Central Bank's oversight is part of a broader effort by the Ministry of Social Affairs to regulate donation collection and charitable project implementation both inside and outside Kuwait. The newly established centre will be responsible for registering charitable associations, organizing relief campaigns, monitoring international donations, and issuing necessary approvals, thereby streamlining processes and improving accountability.
Key features of these regulations include:
- Centralized oversight: The new centre coordinates charity registrations and approvals, reducing bureaucracy and ensuring adherence to legal frameworks before approval by the Legal Committee.
- Enhanced transparency and accountability: The Ministry of Foreign Affairs takes a lead role in monitoring international donations to ensure clear tracking and responsible use of funds for overseas projects, reflecting a commitment to accountability.
- Reporting requirements: Charitable organizations must comply with established guidelines regulating collection campaigns, including limitations on new financial campaigns and reporting on transfers as little as one dinar.
- Alignment with humanitarian and international law standards: A new humanitarian law is expected to be enacted to provide a legal basis for charity activities, which includes executive regulations to be implemented progressively after staff transfer and legal finalization.
- Domestic vs. international priority: Domestic needs are given precedence in charitable funding allocations, followed by support for international humanitarian causes.
- Standardized practices on in-kind donations: Guidelines mandate that in-kind donations (such as food supplies) be purchased from approved sources and passed through specific agencies (like Kuwait Red Crescent Society) for coordination and logistics.
These measures indicate Kuwait's effort to modernize its charity sector by enhancing transparency, improving governance structures, and harmonizing with international compliance standards and humanitarian law. Contracts with money collection companies now necessitate prior written approval from the Ministry, and transfers must be accompanied by a certificate from the Ministry of Foreign Affairs' Humanitarian Action System, verifying the recipient's approval and banking details.
For high-risk countries, advance clearance from the ministry remains mandatory. Civil society organizations must adhere to specific rules for banking transactions, limited to salaries, membership fees, external support, and training course subscriptions. The Central Bank of Kuwait has instructed banks and exchange companies to submit monthly reports on foreign transfers linked to charity and public benefit societies operating in Kuwait.
The move is aimed at safeguarding charitable work, ensuring donations reach their intended beneficiaries, and maintaining Kuwait's strong reputation in humanitarian and development efforts worldwide. These new regulations mark a significant step towards enhancing the transparency, accountability, and efficiency of charitable activities in Kuwait, in line with international best practices.
[1] Ministry of Social Affairs and Labour, Kuwait. (2021). New Regulations for Charity Transfers. Retrieved from https://socialaffairs.gov.kw
[2] Central Bank of Kuwait. (2021). Guidelines for Charitable Organizations. Retrieved from https://cbk.gov.kw
- The Central Bank of Kuwait, in alignment with the Ministry of Social Affairs, has explicitly outlined guidelines for charitable organizations in the banking sector, including reporting requirements and adherence to international standards.
- In the realm of business and finance, banking-and-insurance institutions are now obliged to submit monthly reports on foreign transfers related to charities and public benefit societies under the vigilant oversight of the Central Bank of Kuwait, as part of Kuwait's endeavor to strengthen transparency and accountability in its charity sector.
