Saudi Arabia and Kuwait Forge Strategic Alliance to Bolster Gulf Anti-Money Laundering Defenses

In a landmark move to enhance regional financial security, Saudi Arabia and Kuwait have formalized their cooperation in the fight against financial crime through the signing of a new memorandum of understanding (MoU) focused on anti-money laundering (AML) and counter-terrorism financing (CFT).

This strategic agreement underscores the nations’ shared commitment to upholding financial integrity across the Gulf, reinforcing international compliance, and deepening regional partnerships amid a rapidly evolving global threat landscape.

The MoU brings together Saudi Arabia’s General Department of Financial Investigations and Kuwait’s Financial Intelligence Unit (FIU), both of which are national authorities charged with identifying, reporting, and investigating suspicious financial activities. This development marks a major step forward in combating the growing complexity of cross-border financial crimes, including the misuse of financial systems for laundering money and financing terrorism.

The signing was conducted in parallel with the second official session of the GCC Committee of Financial Intelligence Units, a regional platform that brings together Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates to align AML/CFT strategies and share best practices. The Committee’s work is crucial for harmonizing efforts across Gulf states and responding effectively to increasingly sophisticated criminal networks.

Strengthening cooperation between Saudi Arabia and Kuwait comes in response to heightened threats posed by money laundering and terrorist financing operations that exploit weaknesses in cross-border regulation. The MoU lays the foundation for a more integrated regional response by enabling seamless intelligence sharing, enhancing operational collaboration, and developing joint strategies to tackle new criminal typologies.

As members of the Middle East and North Africa Financial Action Task Force (MENAFATF), both Saudi Arabia and Kuwait are committed to aligning with Financial Action Task Force (FATF) standards. This new agreement reinforces their efforts to remain fully compliant with evolving international best practices and to enhance their national frameworks accordingly.

Central to the MoU is the goal of advancing the quality and speed of financial intelligence exchange. It allows the FIUs of both countries to:

• Share strategic and operational intelligence in support of cross-border investigations.

• Coordinate training programs and capacity-building initiatives for AML/CFT professionals.

• Develop common methodologies for the identification and reporting of suspicious transactions.

• Conduct joint studies and typology assessments to anticipate emerging risks.

These initiatives aim to strengthen defenses against complex and evolving financial crime methods. According to the FATF, the GCC region continues to face key challenges in addressing trade-based money laundering, abuse of legal entities, and risks associated with new payment technologies. The MoU provides the necessary framework for both nations to better detect and deter such illicit activities.

The agreement also emphasizes adherence to the Egmont Group’s principles, which govern the secure and confidential sharing of financial intelligence among member FIUs worldwide. These principles ensure sensitive information is exchanged with due consideration for data protection and operational security.

Both Saudi Arabia and Kuwait have robust legislative foundations in place to support their AML/CFT activities. Saudi Arabia’s framework is anchored in the Anti-Money Laundering Law (Royal Decree No. M/39, 2017), enforced through regulatory bodies such as the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority (CMA). Kuwait’s legal regime is defined by Law No. 106 of 2013, which outlines AML/CFT obligations for financial institutions, designated non-financial businesses and professions (DNFBPs), and reporting entities.

The two nations continually revise and enhance their regulations to remain aligned with FATF recommendations, particularly with regard to emerging threats like virtual assets, the misuse of charitable organizations, and unregulated third-party facilitators.

The broader aim of this MoU is to deepen regional integration by leveraging financial intelligence as a tool for collective resilience. With the Gulf’s reliance on cross-border capital flows, high-value trade, and complex corporate structures, the region is uniquely vulnerable to sophisticated forms of financial crime. Global watchdogs including the FATF, MENAFATF, and the Egmont Group have consistently emphasized the importance of regional coordination and transparent information-sharing mechanisms.

Among the best practices promoted through this agreement are:

• The timely exchange of financial intelligence and case-specific information to uncover illicit fund flows.

• Joint creation of risk indicators and red flag typologies tailored to sectors such as real estate, precious metals, and digital assets.

• Coordinated investigations and cross-border asset recovery operations.

• Continuous skill development, peer exchanges, and technical assistance to support national AML/CFT capacities.

The MoU also reflects both countries’ strategic commitment to implementing national risk assessments and deploying risk-based customer due diligence systems. Efforts to build public-private partnerships are ongoing, with both states striving to establish collaborative platforms between government agencies and private financial institutions.

From an economic standpoint, the strengthened AML cooperation offers tangible benefits. Both Saudi Arabia and Kuwait are pursuing economic diversification and global investment appeal. Demonstrating strong AML/CFT compliance is critical to maintaining trust with international financial institutions, securing correspondent banking relationships, and minimizing exposure to reputational and regulatory risks.

Saudi Arabia’s Vision 2030 program has made transparency, legal integrity, and sound financial governance key pillars of economic transformation. “The mining and industrial sectors represent major growth drivers that are reliant on secure investment environments,” officials noted. “A strong AML/CFT regime is essential to safeguard this vision.”

Kuwait, too, is ramping up its regional economic engagement. Trade flows with Saudi Arabia reached over $36 million in early 2025, underscoring the importance of shared regulatory standards and secure cross-border financial systems. The agreement also takes into account the need to protect the non-profit sector from potential abuse. Workshops held at the GCC level have recently focused on enhancing awareness and bolstering risk management capabilities within charitable organizations, which are considered vulnerable to exploitation by criminal and terrorist financiers.

In conclusion, the MoU between Saudi Arabia and Kuwait marks a strategic milestone in the Gulf’s collective fight against illicit finance. By formalizing intelligence cooperation and aligning AML/CFT frameworks, the agreement sends a powerful message of zero tolerance toward financial crime. It represents a model for regional cooperation, helping the Gulf states to build more resilient, integrated, and future-ready defenses.

As criminal tactics grow more complex, Gulf countries are recognizing the need for coordinated financial intelligence, dynamic legal frameworks, and international collaboration. This MoU not only reinforces Saudi Arabia and Kuwait’s national security priorities but also strengthens the broader financial ecosystem needed to support long-term stability and growth across the Gulf.

By fLEXI tEAM