Executive Regulations of Law No.1/2023 concerning prevention of Conflict of Interest
In an aim to framework conflict of interest disclosure in the state of Kuwait, the Executive Regulations (the “Regulations”) of Law No.1 for year 2023 (the “Conflict of Interest Law”) concerning the prevention of conflict of interest has been published on 10 September 2023 and is effective immediately. The Regulations were passed in accordance with Article 20 of the Conflict of Interest Law and provide specific procedures for performing required disclosures on conflicts of interest. The Conflict of Interest Law was issued in January 2023 and went into effect in April 2023. The Conflict of Interest Law obligates certain categories of people, including workers in private companies where the State (directly or via its authorities or institutions) owns at least 25% of that company’s equity, to make disclosures of conflicts of interest (as defined by the Conflict of Interest Law).
The Kuwait Anti-Corruption Authority (“Nazaha”) regulates and investigates conflict-of-interest matters. The Regulation repeats Article 1 of the Conflict of Interest Law, which defines an interest as follows: “Each case in which the Subject Person has a benefit or a Material or Moral Interest that absolutely or relatively conflicts with the requirements and responsibilities of his title or position in terms of integrity, independence and preservation of public funds.”
The Regulation provides that the conflict of interest occurs where the benefit of material or moral interest to the following related persons:
- those related by marriage to the subject person or kinship up to the second degree;
- the persons under his or her guardianship or custody;
- any physical or moral person related by a business relationship, mediation, agency, or representation; or
- any economic entity and any company in which the subject person and any of the aforementioned persons participate in an influencing ratio to its decision.
In the event of a conflict of interest, the Regulation requires the subject person to disclose the conflict interest within a period not exceeding fifteen (15) days from the date of becoming aware of the conflict of interest. The disclosure must include information or facts, or submission of data or documents indicating the existence of a conflict of interest. The Regulation permits confidential disclosures by way of a special form submitted in a sealed envelope and registered with a serial number in a special record at Nazaha.
Our team regularly works closely with various authorities to best understand applicable rules and regulations in order to best advise our clients on the proper steps to be taken to maintain compliance. Please contact Ahmad Saleh, Senior Associate, at firstname.lastname@example.org for further information or to schedule a consultation.