Afifi: Global's Geographic expansion is concurrent with greater compliance with international standards and anti-money laundering

The currently common term "Compliance" has recently emerged, whereby several conventions and common practices have been initiated for defining the framework that financial and investment institutions have to follow in order to be admitted to markets.

Mr. Mohammed Afifi- Head of Compliance and Anti-Money Laundry Group in Global said,

"Global one of the leading financial institutions in the MENA region is keen to implement the international Compliance and Transparency Standards in disclosing its financial figures"

"This is achieved through full implementation of the principles and guidelines initiated by the Central Bank of Kuwait, the Kuwait Stock Exchange and the Ministry of Commerce & Industry, which are the three regulatory authorities Global is subject to their supervision," added Mr. Afifi.

The geographic expansion strategy that Global has adopted into the GCC countries, and the plans of expansion outside the region, have necessitated the initiation of rigid internal control systems enabling the Company to control and follow up on its operations, whether at the Head Office level in Kuwait, or across its branches and subsidiaries.

The main task of the Compliance & Anti-Money Laundry Department in Global is to periodically review and update its operational systems. Whether those implemented in Kuwait, or those revised should comply with the laws and regulations of the countries in which Global operates, such as the Kingdom of Bahrain.

Afifi went on to say that, in order for our operational systems to be in comply with the requirements of the monetary and supervisory authorities in those countries, the company has undergone final adjustments in comply with the requirements of the Qatar Financial Center. Preparations are also underway to implement the same criteria at Saudi Arabia, Jordan and United Arab Emirates, which are the target markets for Global.

Afifi added, that the credit lines granted by international banks and financial institutions would have never took place unless the receiving firm is fully complied with the laws and common practices stipulated of anti- money laundry.

It is worth mentioning that a recent syndicate loan of US$ 75 million granted to Global by a number of international banks and arranged by West LB Bank is a strong evidence proving the compliance of Global's operational systems with the international standards.

Afifi further mentioned that money laundry is as important as the compliance with the governance principles. Due to the illegitimate act that is committed by those who practice illegal trade with a view to conceal the real source of their illegitimate income and disguise their funds under legitimate transactions.

Money laundering transactions pass through three stages. The first is the deposit of illegitimate funds in banks or financial institutions known as the Placement; the second stage is to carry out a complex series of financial transactions for misleading any attempt to uncover the real source of those funds (Layering) , and finally the third stage is the integration of those funds into the economy as legitimate funds of known sources (integration).

Therefore, "Close Monitoring" is one of the most effective means of combating money laundering transactions. Kuwait has already put in place a strict law for combating money laundering (Law No. 35 of the year 2002). In 2003, "Kuwait Financial Intelligence Unit" was founded by the Central Bank of Kuwait. In addition, the "National Committee for Combat of Money Laundering & Terror Financing Transactions" was formed in 2004. These steps have placed Kuwait at the forefront of the Arab countries in the field of combating money laundering transactions.

In conclusion, the Compliance and Anti-Money Laundering Department at Global implements the criteria of the Practical Guidelines Manual for combating money laundering. The manual comprises the regulations that should be followed in relation to the principle of "Know your customer" and the principle of "Know your customer's business". Training courses have also been designed for all staff levels at the Company, both in Kuwait and abroad.