Critique of the Kuwaiti criminal response to corruption and suggested reforms

This section addresses two issues. First, it evaluates the adequacy and effectiveness of the existing Kuwaiti criminal laws in dealing with grand corruption. This overall assessment is built upon the analysis in the previous section (section 4.3). Second, the section examines how the law can be changed and improved especially regarding grand corruption. In examining the second aspect, this section explores innovative techniques and suggests how these could be incorporated into Kuwaiti laws. These innovative approaches could be harnessed to rectify and further strengthen the legal response based on international practices.

Assessment of existing criminal counter-corruption measures

As emerged from the previous analysis, the criminal law dominates in Kuwait as the key instrument being employed to counter corruption domestically, as evidenced by the number of corruption offences created and the provisions for the proceeds of crime. In fact, Kuwait has put in place a constellation of corruption crimes that arguably cover most, if not all, potential corruption cases. The legal analysis of the criminal laws, supported by the judgments of courts and the opinions of professional experts, allows us to contend that the criminal texts related to corruption are sufficient to deal with corruption cases in Kuwait. Kuwait has achieved notable progress in the arena of criminal counter-corruption measures[1] and the AML law. However, this is not to say that the criminal law is enough to combat the phenomenon of corruption. The criminal law, per sc, is, by no means, enough. The following is overall assessment of what has previously been said.

The bribery offence has been criticised for being fraught with difficulties that mar the effectiveness of the offence. In particular, two issues should be revised: the difficulty of proving bribery and the strict requirement of mens rea.iv> Different solutions may be suggested. For example, inducing insiders to report, backed by an effective system of whistleblowing, could increase the possibility of detecting bribery cases. Some participants also thought that the creation of the IEO and the associated financial disclosures are means to besiege the bribed: if bribery is not detected when committed, it will then be detected later as an ‘unjustified’ increase in wealth. Altogether, the whistleblowing system and financial disclosures have been effective in overcoming the difficulties

Criminal counter-corruption measures 185 related to proof. As stated by Nazaha, one report by a whistleblower who had a reasonable belief that a senior officeholder had engaged in a bribery offence triggered an investigation into the financial disclosure already submitted by that official. The investigation successfully enabled Nazaha to identify suspicious transactions in the suspect’s bank accounts and he could not provide a reasonable justification for their legitimate provenance.[2] Thus, with ameliorations in the counter-corruption provisions, the difficulties inherent in proving bribery could be less stark.

The non-criminalisation of private sector bribery in Kuwait has been said to affect the fairness of the bribery offence. However, that there is a need for a private bribery offence is debatable. The large dependence on the public sector in Kuwait casts doubt on the exigency of criminalised private bribery, at least for the time being this argument is not meant to downplay the several adverse consequences of private bribery. Instead, it is a matter of prioritisation in the jurisdiction of Kuwait. Attention should thus be directed at the potentially instigating role of the private sector in the bribery of public officials, namely, private-to-public bribery. This potential role of the private sector is what has been considered in the Strategy 2019-2024.

The embezzlement and misappropriation offences have been perceived as effective and comprehensive in covering as many cases as possible, though the stated objective of their Act (the PPFA) is perplexing and causes fairness-related concerns. There are, however, problems pertaining to the investigation of such offences: the lack of experienced prosecutors and the non-existence of prosecutorial policies (agreements) for corruption crimes. These two issues impact the effectiveness of these offences when the prosecutors are not well trained in dealing with sophisticated cases (which may lead to producing weak evidence) or when the prosecutors are unable to deal flexibly with each individual case, taking into consideration the circumstances surrounding the case. Empowering the prosecutors to enter into agreements could effectively improve the embezzlement and misappropriation offences. Again, an enhanced system of whistleblowing and informing would help here.

In regard to the intentional harm and exploitation of office offences, the issues associated with the elements of ‘harm’ and ‘benefits’ highlight two difficulties: the difficulty in proving the officeholder’s intention to cause ‘harm’ and the

difficulty in proving the benefits for the officeholder or others.[3] To overcome these difficulties, it is suggested that providing specialised courts with qualified judges and prosecutors could effectively help to deal with complex cases. Currently, Nazaha acts as a specialised body in counter-corruption matters, with a wide range of legal powers. The designated role of Nazaha as a buffer between the reporting parties and the prosecutors enables it to perform technical functions that the courts may not be able to, such as those related to complex economic assumptions.' Moreover, prosecutorial agreements would avoid the difficulties regarding uncertainty associated with prosecuting those cases. Whenever a benefit is achieved for others by the act of an officeholder, the ability to arrange settlements with the defendants can secure the return of such a benefit to the state. In the existing laws, the challenge is that such benefits cannot be returned to the state unless a criminal conviction is secured, which can be uncertain given the evidential difficulties (especially if the official’s intention to secure such benefits for others cannot be proved).

In terms of the conflict of interest offence, its criminal nature brings some criticism. Conflicts of interest should first be subject to a preventive strategy. Instead of relying solely on the criminal law, transparency measures could perform pre-emptive functions. Officeholders most susceptible to conflicts of interest could be required to register their respective interests before the assumption of office. Having such a registry would render the officials under a constant check, both by people and by other competent public bodies. The registry would deter officeholders from engaging in conflicts of interest and/or facilitate investigations into conflicts of interest in the future. The United Kingdom has good practice in this regard. The Ministerial Code requires ministers to ensure that no conflict of interest transpires: upon appointment, they must provide a list of all relevant interests known to them that may affect their decisions in the future. Three reforms to the CIA are suggested here to respond to its unconstitutionality as decided by the Kuwait Constitutional Court.

First, the CIA should reconsider the social construction of Kuwaiti society, as the applicability of the CIA to the fourth-degree relative of the officeholder is problematic. Therefore, the scope of criminalisation should be limited, because of factors such as the intra-society relationships and the small population, and hence the likelihood that professional people may know each other. Second, there could be a waiver of conflict of interest in cases of relative conflict. A balance between officeholders’ public role and their personal interest as private citizens should be struck. Whenever an officeholder has a

Criminal counter-corruption measures 187 minuscule share in a business, or the financial interest is so remote that it is unlikely to improperly affect his/her decision, the officeholder should only have to disclose such shares/interest and should not have to leave their office/ position or divest the private interest. Third, further arrangements related to managing a conflict of interest would arguably solve the issues mentioned previously. Rather than leaving office or divesting the private interest, the law may establish a recusal policy with appropriate procedures to properly manage a conflict of interest ‘by having another official temporarily perform the official’s duties’.[4]

Next, the criminal nature of the IEO provokes the constitutional safeguards provided for the suspect. The current construction of the IEO in Kuwait law - whereby it is contingent on officials submitting financial disclosures - has some limitations. These financial disclosures are the only source of information regarding any suspicious increase in wealth and the only cause for triggering an investigation. The literature suggests additional sources for triggering investigations into suspicious illicit enrichment. Of particular relevance are ‘lifestyle checks’ on public officials, in which enquiries are undertaken to check whether the lifestyle of an officeholder cannot reasonably be explained by his/her legal income. These lifestyle checks would not replace but, rather, would complement the financial disclosures; as a result, senior, junior, and non-citizen officials would not escape liability just because they had not submitted a financial disclosure or because they were not obliged to submit one.

The current misapplication of the ML offence reveals its inability to achieve its intended effect. The requirement that the prosecutor must present evidence that the money is derived from a particular predicate offence is impractical. Lawyer-1 argued for reducing the difficulties provided by the burden of proof and adopting ‘circumstantial evidence’: whenever there is suspicion, there should be effective mechanisms to explain the money based on ‘logical and reasonable justifications’. It is argued that this understanding of the ML offence is consistent with what Alldridge mentioned, that is, ‘A common complaint was that there was insufficient evidence to bring prosecutions’. A good example is the UK POCA 2002, which has ‘gradually undermined the significance of the actual source of the funds’. As stated in R v Anwoir (Ilham), one of the ‘two ways in which the Crown can prove the property derives from crime ...’ is ‘ by evidence of the circumstances in which the property is handled which

is such as to give rise to the irresistible inference that it can only be derived from crime’.[5] Although there are other decisions that have reached different conclusions, the general, non-specific statutory definition of ‘proceeds of crime’ in the Kuwaiti AML/CFT Act allows for the idea of ‘irresistible inference’ to be used in the courts in Kuwait. Practitioners are encouraged to adopt this understanding.

The criticism of each crime does not so much relate to the offences themselves as to the criminal law system. It can be said that what the professionals were referring to is not the difficulties affecting the effectiveness of each offence, but rather, the difficulties of the criminal law as a whole - even if they were not explicit in this regard. All of these critical points relate to the nature of the criminal law and not to the essence of the offences. One point can be inferred from the aforementioned analysis: the fact that not a single participant out of those interviewed mentioned the difficulties of the criminal law itself in countering corruption implies that they do not even conceive of instruments other than the criminal law. This inference is an indication that the philosophy underlying the current arrangements and the Kuwaiti policymakers and professional experts have a clear inclination towards, or preference for, the criminal laws to combat corruption. The criminal law is a conventional instrument and does not, at least in the case of Kuwait, provide for any innovative measures to combat corruption. The IEO is an exceptional recent development in the arsenal of counter-corruption laws. But as much as it brings in innovation, the IEO is still a measure that is criminal in nature that has been added to the existing predominant criminal responses. Also, whether or not the IEO is effective is yet to be determined. It is thought that the time has come to adopt alternative non-criminal measures to tackle the scourge of corruption; this is the subject of chapter 5.

In relation to the whistleblowing system, the discussion in section 4.3.7 generally focused on the role of individuals. As shown, the whistleblowing system in Kuwait is, to a large extent, comprehensive and bringing concrete results. The Strategy 2019-2024 takes into account having an encouraging rewards scheme to secure the reporting of more wrongdoings. The Strategy aims to establish a ‘comprehensive rewarding policy’ and to regularly review its effectiveness regarding its potential effect on inducing individuals to come forward and report corruption incidents. However, the clandestine nature of corruption keeps not only the law enforcement authorities uninformed, but also would-be whistleblowers. More attention to should be paid, then, to the role of offenders in reporting crime, since the current arrangements in this regard are arguably insufficient. Innovation is suggested in the next section.

  • [1] See UNODC (2013). 2 See MENAFATF (2015). 3 See chapter 4.3.1. 4 Judge-1. 5 Official-4; Lawyer-2.
  • [2] See . 2 Official-2; Lawyer-1. 3 Boles (2014b). ' 4 Official-2. 5 Official-4; Official-5. 6 See section 7 NGO-3. 8 See below section 9 Lawyer-1.
  • [3] See section 2 Lawyer-2; Judge-2. 3 See section 4 See section 5 See . 6 See section 7 OECD (2003).
  • [4] See OECD (2005, p. 20). 2 See section 4.3.4. 3 Muzilaetal. (2012). 4 There are several safeguards to avoid abuses. See ibid., p. 43. 5 Lawyer-2 argued that bribery can be displaced to non-citizens officials. See section 4.3.1. 6 See section 4.3.5. 7 Alldridge (2008, pp. 440-441). 8 McCluskey (2009, p. 719).
  • [5] [2008] EWCA Crim 1354; [2009] 1 WLR980, 987. 2 Walters (2009). 3 See section 4.3.7. 4 Nazaha (2019, p. 98).
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