Compliance in Progress Summary
According to a 2004 Financial System Stability Assessment (FSSA) report published by the International Monetary Fund (IMF), banking sector regulation and supervision in Kuwait was strong and effective and broadly in accordance with the Basel Core Principles (BCPs) for Effective Banking Supervision. Further, Kuwait was fully or largely compliant with almost all of the BCPs. The areas where Kuwait was found non-observant included the operational independence of the Central Bank of Kuwait, the country's banking sector supervisor, its licensing and remedial powers and powers of consolidated supervision, and supervisory cooperation and information exchange. The World Bank and the IMF also offered to provide technical assistance to Kuwait to implement the recommendations of the FSSA, if so requested. The IMF did acknowledge that an amendment to the key banking sector law, the Central Bank Law (Law No. 32 of 1968), which was under consideration by the Kuwaiti parliament, would implement the FSSA recommendations and further strengthen an already broadly sound supervisory regime. The amended law, Law No. 28 was enacted in January 2004, shortly after the IMF assessment; however, no further information on its effectiveness in addressing the FSSA's recommendations is publicly available.
General Overview
In 2004, the International Monetary Fund (IMF) published a Financial System Stability Assessment (FSSA) on Kuwait, the findings of which were based primarily on the work undertaken by a joint IMF/World Bank mission in 2003 under the Financial Sector Assessment Program. The 2003 FSAP was undertaken as an update of an earlier (2000) assessment of Kuwait's compliance with the Basel Core Principles (BCPs) for Effective Banking Supervision. The 2004 FSSA concludes that the banking sector is sound, well regulated and adequately supervised. Further, banking regulation and supervision are "broadly in line with international standards" (p. 1). Some weaknesses were noted, particularly with regard to the operational independence of the supervisor, the Central Bank of Kuwait (CBK), and its licensing and enforcement powers, as also in the areas of consolidated supervision, supervisory cooperation and information exchange.
The 2004 FSSA notes that the 2003 FSAP Update of the 2000 assessment shows that the country is "compliant or largely compliant with most of the principles and subprinciples" (p. 10). A 2004 International Bank for Reconstruction and Development (IBRD)/World Bank report notes that the World Bank and the IMF offered to provide technical assistance to Kuwait to implement the recommendations of the FSSA, if so requested. The IMF, in its 2004 FSSA, however, did acknowledge that an amendment to the key banking sector law, the Central Bank Law (Law No. 32 of 1968), was under consideration by the Kuwaiti parliament, and that its enactment would ameliorate the mentioned deficiencies in the regulatory framework. As a matter of fact, the Kuwaiti authorities shared with the IMF assessment team translated drafts of the pending legislation and they evidenced the fact that "the proposed measures would further strengthen an already broadly sound supervisory regime" (p. 34).
The CBK, the country's banking sector regulator and supervisor, was established by Law No. 32 of 1968 to replace the Kuwaiti Currency Board, which was only a monetary authority and did not have supervisory authority over the banks of Kuwait, the CBK's website reveals. The CBK, therefore, filled the gap in authority of a financial sector and banking supervisor and started operations in April 1969. The CBK's supervisory responsibilities are discharged by its Supervision Sector, which enforces the CBL, and monitors banks' compliance with the law, and all rules and regulations promulgated under it. Its main objective is to ensure the stability and soundness of the banking and financial system in Kuwait and to safeguard the interests of the depositors. The 2004/2005 annual report of the CBK provides information on the passage of the amendment to the CBL (Law No. 32 of 1968). The amended law, Law No. 28 of 2004, according to the report, "encompassed enhancing CBK’s capabilities in regard to consolidated supervision over the external branches and affiliated companies of local banks, and the exchange of information with external supervisory authorities in this regard, along with allowing foreign banks to enter the domestic market…in addition to imposing constraints on ownership concentrations in local banks, and setting diversified and gradual penalties for violations committed by the banking and financial system units subject to CBK’s supervision" (p. 10).
Kuwait's financial system is centered on its banking sector, notes the 2004 FSSA. Banks are diversified and well-capitalized with strong liquidity, asset quality and ability to withstand significant shocks. Recounting the progress made by the CBK in enhancing banking supervision in the years leading to the FSSA, the IMF notes that the Central Bank strictly enforces its prudential safety and soundness requirements through off-site and onsite supervision. It has also made notable progress in developing an early warning system. The CBK is "broadly transparent" (p. 9) in formulating and implementing its banking regulations. Further, its risk management requirements of banks are comprehensive and commensurate with the size, nature, and scope of their operations. The CBK requires internal control and external audits that further strengthen risk management. The IMF mentions that Islamic banks and financial institutions were brought under the supervision of CBK in December 2003; however, this involves various challenges to the supervisory framework and process. The IMF also cautioned the CBK to employ continued vigilance of the banking sector to avoid bailout of banks, such as during the first gulf war.
Providing an overview of the Kuwaiti banking and financial system as it copes with the global financial crisis, the 2009 Article IV report of the IMF finds the sector hit hard by the turmoil. Owing to huge capital overflows in part due to concerns of counterparty risk, liquidity situation of banks tightened. The fall of Lehman Brothers further deepened the crisis, and the KSE index got knocked by 50 percent, largely in the investment and real estate sector. In October 2008, the third largest Kuwaiti bank that was badly embroiled in derivatives transactions lost $1.4 billion, and in December 2008 the largest investment company defaulted on its credit obligations of almost $3 billion. The company is now seeking debt restructuring. A large Islamic bank also shows signs of distress and is seeking to refinance its debt to the tune of $1 billion. In light of the global crisis, the IMF asserts that the Gulf Cooperation Council (GCC) nations should gather greater momentum to prepare for the monetary union. The IMF mentions that the GCC members have expressed their intent to form the union in 2010. A monetary council, which would be a precursor of a GCC Central Bank, will be established by the end of 2009. The IMF advises Kuwait to strengthen the supervision of banks' risk management practices to avert future systemic distress. In this context, an April 2009 statement by the IMF Staff Representative on Kuwait mentions the enactment of the Financial Stability Law in March 2009. The law aims to preserve financial stability by stipulating capital injections and government guarantees to undercapitalized banks, and provide a legal framework for the resolution of insolvent banks. The support to banks will carry some conditionality, such as the right of the government to merge institutions, prohibition from speculative investments and from repayment of existing loans from the government guarantee.
Commenting on the health of the banking sector, the U.S. Department of Commerce's (DoC) 2009 Doing Business Guide notes that total assets of the commercial sector including Sharia-compliant banks amounted to USD 149,549 billion, as of December 2007. However, "the quality of local banks varies from blue chip to weak" (p. 37). Some banks have non-performing assets on their books, and some are heavily invested in low yielding government bonds. However, the legal, regulatory, and accounting systems – while lacking transparency - are "generally considered consistent with international norms" (p. 37). Providing some history on the banking system in Kuwait, the U.S. DoC reports that in the 1980s commercial banks largely operated on government subsidies, loaned on non-market terms to favored customers, and had guaranteed profits, equity, liabilities, and deposits. In such a system, payment discipline was poor and banks incurred frequent real economic losses. In 1992, the CBK introduced a bank stabilization program, under which it purchased the outstanding domestic credits of all commercial banks, eliminated all guarantees except guarantees on bank deposits, and stipulated that bank management would be responsible for all assets and liabilities of the banks and that all losses would remain within the banks. The CBK improved banking supervision and steered the credit market to become more efficient, fair, and market driven.
A U.S. Department of State (DoS) report published in 2008 states that Kuwait has ten private local commercial banks, including four Islamic banks. Islamic banking is gaining strength in Kuwait with two more banks slated to provide Islamic banking products and services in the near future, the report adds. There is also a state-owned specialized bank, the Industrial Bank of Kuwait, which grants medium and long-term financing for industrial development. In 2001, the Kuwaiti sector was opened to foreign competition with the passage of the Foreign Direct Investment Law, and beginning January 2004, banks could be 100 percent foreign-owned. However, foreign banks can only open one branch in the country and can only conduct investment banking activities, not retail banking. Per the 2009 U.S. DoC Guide, there are six branches of foreign banks operating in Kuwait. The financial crisis, which led to the massive default of the Gulf Bank, prompted the government to guarantee all deposits in Kuwaiti banks, the U.S. DoS notes. The DoC Guide adds that CBK worked with the Gulf Bank and its key shareholders to orchestrate a USD 1.4 billion recapitalization program and the Kuwait Investment Authority, an autonomous government body, stepped in to act as the lender of last resort.
The Principles
II1. (1) Clear responsibilities and objectives for each supervisory agency.
Per the 2004 FSSA, the CBK has been granted clear authority and responsibility under the Central Bank Law of 1968 (as amended in 1977) to conduct regulation and supervision of the banking sector, including licensing and inspecting banks and other non-banking institutions, such as investment companies, exchange houses, and investment funds. The CBL also grants powers to the CBK to issue directives and instructions to regulate banking activities. In 2003, the CBL was amended to bring all Islamic banks under the regulatory ambit of the CBK. However, the FSSA finds some sharing of supervisory authority with the Ministry of Finance (MoF) in theory, although in practice, the CBK determines the majority of the bank supervisory actions. In this respect, the IMF recommends amending the CBL "to further enhance the independence of the CBK in its capacity as banking regulator and supervisor" (2004, p. 30). The amended law, Law No. 28, was enacted in January 2004. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle and there is no further information publicly available as to the effectiveness of the amended CBL in implementing the IMF recommendations regarding this principle.
II1.(2) Operational independence and adequate resources.
In the words of the 2004 IMF FSSA, "the independence of the CBK's supervisory authority is fairly well established" (p. 31). However, it brings attention to the interference of the MoF in the CBK's decision-making process in the areas of licensing, closure, and administrative/remedial actions, and notes that it could adversely impact the CBK's operational and supervisory independence. In this respect, the IMF recommends amending the CBL "to further enhance the independence of the CBK in its capacity as banking regulator and supervisor" (2004, p. 30), and to remove the MoF's influence in the CBK's supervisory policies, decisions, and actions. The amended law, Law No. 28, was enacted in January 2004. In terms of staff resources, the FSSA affirms that the CBK has a capacity of 140 professional supervisory and support staff to achieve its goal of prudential supervision. The CBK also has an independent budget, although it must be approved by the parliament. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle and there is no further information publicly available as to the effectiveness of the amended CBL in implementing the IMF recommendations regarding this principle.
II1.(3) A suitable legal framework for authorization and ongoing supervision.
See Principle 1.(1).
II1.(4) A suitable legal framework to address compliance with laws as well as safety and soundness concerns.
As the 2004 IMF FSSA finds, the CBK has the power to establish and enforce the standards of prudential safety and soundness in banks. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II1.(5) Legal protection for supervisors.
The 2004 IMF FSSA observes that the CBK supervisors are not granted formal legal protection in the discharge of their duties. Protection is provided under the general service laws that all government employees are subject to. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II1.(6) Arrangement for sharing of information between supervisors and protection of confidentiality of shared information.
One significant deficiency in Kuwait's supervisory regime, according to the 2004 IMF FSSA, is the legal prohibition on the CBK from sharing confidential supervisory information with other domestic, governmental, and foreign supervisory authorities. The IMF advises Kuwait to amend the CBL to remove this deficiency and allow for supervisory information exchange. The Kuwaiti authorities respond to this recommendation by mentioning that amendments to the CBL are pending in the National Parliament and will address the deficiencies relating to information sharing. The amended law, Law No. 28, was enacted in January 2004. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle and there is no further information publicly available as to the effectiveness of the amended CBL in implementing the IMF recommendations regarding this principle.
II2. Clearly defined permissible activities for banks and control of the use of the word 'bank'.
According to the 2004 IMF FSSA, "the Central Bank Law explicitly identifies banking as a regulated activity" (p. 31). A bank is required to be registered in the CBK's Register of Banks to legally commence business. The CBL was amended in 2003 bringing Islamic banks under the supervision of the CBK. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II3. Criteria for structure, directors, operating plan, controls, financial condition and capital base.
The CBK has established criteria for licensing of banks and has also spelled out the minimum qualification requirement for directors and senior management, the 2004 IMF FSSA notes. However, ownership issues have not been sufficiently clarified. The CBK lacks the authority to assess the suitability of controlling shareholders of newly proposed banks or established banks whose controlling shareholder interests are being acquired by another entity. Under Kuwaiti corporate law, Kuwaiti individuals, groups, or corporations may acquire controlling interests in any company, including banks, without the need for regulatory approval. This, per the FSSA, "is a major impediment to the CBK’s prudential oversight authority and its ability to supervise banks and related companies on a consolidated basis" (p. 31). The IMF, therefore, calls for explicit authority to the CBK to reject applications for bank licenses if the owners fail to meet the "fit and proper" criteria. At the time of the 2004 FSSA, the Kuwaiti authorities noted that amendments to the CBL that were then pending in the National Parliament would address the deficiencies relating to "share transfers involving ownership changes" (p. 34). The amended law, Law No. 28, was enacted in January 2004. However, there is no further information publicly available as to its effectiveness of the amended CBL in implementing the IMF recommendations regarding this principle.
II4. Authority to review and reject transfer of ownership.
See Principle 3.
II5. Authority to review major acquisitions and investments.
Per the 2004 IMF FSSA, the CBK has the power to review and approve major acquisitions by banks and bases its judgment on the risks involved both to the bank and to the larger public interests. The CBK conducts the approval process by analyzing the specifics of the investment proposal and its impact on the concerned bank. However, the CBK does not base its judgment on a pre-established benchmark or standard, thereby making the process potentially non-transparent and not objective. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II6. Minimum capital adequacy requirements (meet Basle Capital Accord for internationally active banks).
The 2004 IMF FSSA finds that the CBK's prudential regulations and requirements for banks are "generally sound" (p. 32). In particular, the minimum capital requirements for banks are above the minimum stipulated under the Basel I. In practice, banks have an average CAR that is above the regulatory minimum of 12 percent. The IMF also found in 2003 that Kuwaiti banks were "well capitalized, highly liquid, and the quality of their assets has improved over time, albeit unevenly" (p. 21). However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
CP7. A method exists for the evaluation of procedures related to loans, investments and portfolio management.
According to the 2004 IMF FSSA, "the supervisory standards for credit policies, loan evaluation and loan loss provisioning…are generally consistent with the BCP" (p. 32).
CP8. Policies, practices and procedures for evaluating the quality of assets and the adequacy of loan loss provisions and reserves.
Per the 2004 IMF FSSA, "the supervisory standards for credit policies, loan evaluation and loan loss provisioning…are generally consistent with the BCP" (p. 32). Accounts are classified on the basis of delinquency instead of on loan quality. To make up for this deficiency in its loan classification methodology, the CBK requires all banks to maintain a general 2 percent provisioning for all performing loans.
CP9. Prudential limits and management information system on concentration of exposure.
As noted by the 2004 IMF FSSA, "the supervisory standards for credit policies [and]…large exposure limits...are generally consistent with the BCP" (p. 32).
CP10. Arm's length rule and monitoring for connected lending.
According to the 2004 IMF FSSA, "the supervisory standards for credit policies [and]…connected lending...are generally consistent with the BCP" (p. 32). However, the IMF also points out that "connected party" is too narrowly defined and is open to potential abuse. The IMF advises the CBK to expand the definition of connected party to include affiliates, and entities related to the directors through common ownership.
CP11. Policies and procedures for country risk and transfer risk.
In the words of the 2004 IMF FSSA, "the supervisory standards for country risk are generally consistent with the BCP" (p. 32).
CP12. Measuring and monitoring market risk. Limit and/or specific capital charge on market risk exposure.
According to the 2004 IMF FSSA, "the CBK's approach to the supervision of country, market, and other risks is broadly in line with international standards" (p. 32). Further, since Kuwaiti banks do not offer a wide range of products, their market risk exposure is limited, the IMF finds.
CP13. Comprehensive risk management processes.
According to the 2004 IMF FSSA, "the CBK's approach to the supervision of country, market, and other risks is broadly in line with international standards" (p. 32). Further, external auditors are also important instruments for independent oversight and the governance process. They submit written reports to the CBK when they express a qualified opinion in the financial statements. They must also meet with the CBK supervisors to discuss why they expressed a qualified opinion.
II14. Adequate internal controls.
Per the 2004 IMF FSSA, "entities subject to CBK supervision…have adequate governance arrangements" (p. 26). Further, external auditors are important instruments for independent oversight and the governance process. They submit written reports to the CBK when they express a qualified opinion in the financial statements. They must also meet with the CBK supervisors to discuss why they expressed a qualified opinion. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II15. Strict "know-your-customer" rules and high ethical and professional standards.
The IMF finds in 2004 that although Kuwait's anti money laundering/combating the financing of terrorism (AML/CFT) regulatory and supervisory regime has been improved through the passage of Law No. 35 of 2002 and a revision of CBK's AML guidelines to local banks that are "broadly in line with good international practices" (p. 32), several significant vulnerabilities still remain in the overall framework. Importantly, terrorism financing has not been criminalized and legislation has not seeped into the entire financial sector. The IMF calls for more independence of the FIU, the country's financial intelligence unit, and advises that it be given the authority to cooperate with its foreign counterparts. The IMF also advises Kuwait to "lower the level of suspicion required for the filing of suspicious transactions report" (pp. 15-16), and to include specific anti-terrorism financing provisions in the new AML Law. In this context, the 2009 Article IV report by the IMF mentions that the AML/CFT Law is being revised "to make it compatible with international standards" (p. 15), and is under consideration by the MoF. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II16. Effective supervisory system consisting of on-site and off-site supervision.
The CBK performs both off-site and on-site supervision, the 2004 IMF FSSA observes. Banks submit monthly and quarterly reports to the CBK. The CBK may increase the frequency of such submissions if deemed necessary. This information is also validated through on-site inspections and the utilization of external auditors. Further, Islamic banks have also come under the CBK's supervision since December 2003 and the latter has developed examination procedures to inspect Islamic banks and their products. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II17. Regular contact with bank management and understanding of bank's operations.
As the 2004 IMF FSSA finds, the CBK supervisors maintain regular contacts with banks. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II18. Analytical reports and statistical returns on solo and consolidated basis.
Per the 2004 IMF FSSA, banks submit monthly and quarterly reports to the CBK. The CBK may increase the frequency of such submissions if deemed necessary. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II19. Independent validation of supervisory information through on-site examination or external auditors.
The CBK performs both off-site and on-site supervision, the 2004 IMF FSSA observes. Banks submit monthly and quarterly reports to the CBK. The CBK may increase the frequency of such submissions if deemed necessary. This supervisory information is also validated through on-site inspections and the utilization of external auditors. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II20. Ability to supervise on a consolidated basis.
As the 2004 IMF FSSA finds, "consolidated supervision in Kuwait has been limited" (p. 32), mainly since the CBK does not have the legal authority to approve ownership changes in banks, and because it cannot share supervisory information with other domestic, governmental, and foreign authorities. The CBK is also not authorized to request corporate information from the entities it supervises, thereby preventing it from adequately evaluating the risks involved in their non-banking activities and affiliates. The IMF, therefore, advises Kuwait to enact the draft amendment to the CBL so that the CBK gets the legal authority to share information with its counterparts. The IMF also suggests that once the amendment is ratified, the CBK enter into MoUs with domestic and foreign authorities for confidential information exchange. At the time of the 2004 FSSA, the Kuwaiti authorities noted that amendments to the CBL that were then pending in the National Parliament would address the deficiencies relating to consolidated supervision, information sharing, and international cooperation. The amended law, Law No. 28, was enacted in January 2004; however, there is no information publicly available as to its effectiveness in addressing the requirements of this principle.
II21. Consistent accounting policies and practices that provide a true and fair view of the financial condition of the bank.
Per the 2004 IMF FSSA, all banks are required to prepare financial statements and other reports in accordance with International Accounting Standards (IASs). Banks listed on the Kuwait Stock Exchange are also required to have their financial statements signed by their external auditors. The 2009 Doing Business Guide by the U.S. DoC also finds that the CBK requires all banks to prepare annual reports that meet international accounting standards. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle.
II22. Adequate supervisory measures to ensure timely corrective action.
Per the 2004 IMF FSSA, the CBL grants the CBK a wide range of corrective measures to respond to banks that violate or otherwise fail to meet their regulatory requirements. The measures range from a warning, reduction or suspension of credit granted to it, prohibition from engaging in certain activities, limits on the business, appointment of a temporary controller, take over of the bank to ascertain its viability, and removal from the Registry of Banks. However, the IMF remarks that these measures are "limited in scope and are not based on predefined, explicit criteria such as prompt corrective action measures" (p. 33). Amendments to the CBL (at the time of 2004 FSSA) were expected to expand the corrective measures available to the CBK, and allow it to remove the staff of banks, dissolve their board of governors, and appoint a commissioner to manage banks on an interim basis till a new board is appointed, without seeking prior approval from the MoF. However, the CBK would still require the MoF's approval to revoke the license of a bank or to arrange for a bank merger. The IMF advised Kuwaiti lawmakers to grant the CBK the sole authority to take these decisions in order to enhance its supervisory independence as well as to enhance its effectiveness in handling distressed banks. In addition, the CBK asserts that it has adequate powers to take corrective action to deal with problem banks. Moreover, the Kuwaiti banks are well capitalized and well supervised by the CBK and therefore "the emergence of banking problems is unlikely" (p. 20). Also, no bank has ever been closed or its license revoked by the CBK. During past periods of crisis, the CBK and the government had intervened to shield the banking system from being exposed to the systemic risks posed by them. These guarantees were not legislated upon but the banks took them as an implicit support from the government to prevent their failure in the future as well. The IMF recommended that the government inform both the banks and the public at large that in the future no such bailouts will be initiated and that the distressed bank will be taken control of and its shareholders' net worth reduced to zero. In addition, the government is advised to introduce a formal framework for dealing with troubled banks, and make it transparent so that shareholders of banks are apprised of the expectations of the CBK as regards maintaining their licenses. However, the 2004 FSSA does not explicitly assign a level of compliance to Kuwait for this principle and there is little information publicly available as to the effectiveness of the amended CBL in implementing the IMF recommendations regarding this principle.
II23. Banking supervisors must practice global consolidated supervision over their internationally-active banking organizations.
According to the 2004 IMF FSSA, the CBK has the power to supervise the activities of the internationally active banks. The CBK's approval is required for banks to set up their overseas offices and branches. The IMF comments that although there are several Kuwaiti banks with overseas presence, only one foreign bank has its branch in Kuwait. This goes to show the restriction on foreign ownership in Kuwait. As the 2004 IMF FSSA further observes, the CBK cannot share information with home and host country supervisors due to the strict secrecy provisions in the banking law. At the time of the 2004 FSSA, the Kuwaiti authorities noted that amendments to the CBL that were then pending in the National Parliament would address the deficiencies relating to consolidated supervision. The amended law, Law No. 28, was enacted in January 2004; however, there is no information publicly available as to its effectiveness in addressing the requirements of this principle. The IMF, in its 2004 FSSA, also suggested that the CBK enter into memoranda of understanding (MoUs) with foreign authorities for confidential information exchange.
II24. International exchange of information with other supervisors.
As the 2004 IMF FSSA observes, the CBK cannot share information with home and host country supervisors due to the strict secrecy provisions in the banking law. However, at the time of the 2004 FSSA, there was pending legislation that was expected to remove this hindrance to supervisory information exchange. The amended law, Law No. 28, was enacted in January 2004; however, there is no information publicly available as to its effectiveness in addressing the requirements of this principle. The IMF, in its 2004 FSSA, also suggested that the CBK enter into memoranda of understanding (MoUs) with foreign authorities for confidential information exchange.
II25. Supervision of local operation of foreign banks and information sharing with home country supervisors.
See Principle 24.
