Kuwait Law No. 25 of 1996: an even playing field

Abstract

Recently) the Kuwaiti Government took steps to rectify what many in its Parliament consider to be trarlsgressions on public funds. More specifically, Parliament focused its attention on the problem of commissions and payments paid as part and parcel of contracts with the Govemment and its entities. As a result, on 11 August 1996, Kuwait Law No. 25 of 1996 regarding the disclosure of commissions in conneciion with government contracts (the Law) was passed. On 18 August 1996, the Law, upon ratification and offcial publication, became effective. The passage of this Law, upon raiification and official publication, became effective. For years now, US companies have been irl a league of their own iIl that they have had lo abide by The Foreign Corrupt Practices Act (FCPA). Under the FCPA, US companies are forbidden from making payments meant to influence an act or decision of a foreign official or meant to induce the official to affect a decision which would help the company in obtaining business. Conversely, companies in other countries were not faced with such limitations. It would appear, however, that with the passage of this Law, the tides are shifiing towards a more even playing field. The text of the Law contains many ambiguities, which are not greatly clarified by the available legislative history. It is tlOt clear at present what steps, if any, will be taken to clarify the Law either in the Kuwaiti National Assembly or at the level of the various ministries charged with implementing it. It is unlikely that any steps will be formally taken to clarify the scope of the Law in the short-terst. As such, the goal of this article is to help clarify the scope of the Law by examining itS legislative history and text.