In the Direct Investment Promotion Law, the Kuwaiti legislator laid down the penalties to be imposed on investment entities in case they violate the provisions of the law or the licensing requirements. It also laid down for these entities several rules regulating how the investor can complain about the KDIPA penalties.

Sanctions imposed on investment entities

The Direct Investment Promotion Law in the State of Kuwait permits the Board of Directors of the Investment Promotion Authority to impose on the investor who violates the provisions of the law or the licensing requirements one of the following penalties:

1. Written warning, and a more severe penalty is imposed if three warnings are issued to the same investor or the same investment entity within one year from the date of the first warning
2. Partial or total deprivation of the benefits and exemptions granted to him, and the deprivation decision may be reconsidered if the violation is corrected
3. Administrative Temporary Pause

Cases of license cancellation or investment liquidation

The license of the investment entity shall be canceled by force of law in the following cases:

1. In the event that the investment entity ceases its activity and conducts its business for a period exceeding one year without an acceptable excuse

2.2- In the event of a delay of more than one year from the date of the actual start-up of the time schedule submitted by the investor to the KDIPA upon requesting the license, without an acceptable excuse.

In other cases, it is not permissible to cancel the license or liquidate the investment except by virtue of an order issued by the President of the High Court based on a petition submitted to him by the Direct Investment Promotion Authority explaining the justifications for its request.

The  investor’s grievance against the KDIPA penalties

The Direct Investment Promotion Law allows the investor to file a grievance against the penalties imposed on him by the Authority, within thirty days from the date of notification of the penalty decision, provided that the appeal is decided upon within thirty days. In the event of rejection of the appeal, the decision must be in writing and reasoned.

The penalties imposed on the investor and the date they were notified to him shall be recorded in the investment register in the section on the investment entity associated with it, and the imposition of these penalties shall not prejudice civil and criminal liability.

How does an investor complain about the penalties and decisions that are imposed on the investment entity?

The regulation of the Direct Investment Promotion Law came to regulate how the investor can complain about the penalties and decisions imposed on the investment entity as follows:

First: Formation of a Grievance Receiving Committee

The Board of Directors of the Direct Investment Promotion Authority shall form a committee to receive grievances, consisting of at least three members, among whom a chairperson shall be appointed. It shall be competent to receive grievances from stakeholders regarding the decisions issued by the Direct Investment Promotion Authority, the grievance shall be lodged with the committee within thirty days from the date on which the complainant was notified of the decision or became aware of it.

Second: The documents that must be attached to the grievance

The regulation of the Direct Investment Promotion Law requires that the grievance be accompanied by supporting documents, in particular the following:

1. The complainant’s name, capacity, address, and contact details
2. The date of issuance of the decision appealed against and the date on which the complainant was notified or became aware of it
3. The subject of the grievance and the reasons on which it is based

Third: Submitting grievances to the Secretary of the Authority’s Board of Directors

The grievances of investment entities are submitted to the Secretary of the Board of Directors of the Direct Investment Promotion Authority, who shall notify the Director General immediately upon their receipt. These grievances shall be recorded in the register prepared for this, and a receipt shall be given to the grievance bearing the registration number and date.

Fourth: Presenting the grievance to the Grievance Receiving Committee

The grievance shall be submitted to the Chairman of the Grievance Receiving Committee to set a date for a session to consider it, and the complainant shall be notified of it to appear before the committee by himself or by his representative or whoever represents him.

Fifth: Deciding on the grievance

The Grievance Receiving Committee shall decide on the grievance with a reasoned decision within thirty days from the date of its registration. The committee’s deliberations are confidential and its decisions are issued by the majority, and the committee’s decisions on the grievance are final.

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