Kuwait's cabinet passed an anti-corruption draft law on Sunday, which includes articles on financial disclosure and money laundering, with penalties of up to seven years in prison, the state news agency KUNA reported.
The crimes covered by the law include manipulation of public tenders and auctions, bribery, counterfeiting, forgery and graft, KUNA said.
Earlier this month, the International Monetary Fund said that Kuwait's anti-money laundering framework showed weaknesses in the preventive measures for financial institutions and a lack of supervision and monitoring.
The draft law will be referred to the OPEC member's ruler and then to the parliament.
About 2,000 Kuwaitis protested in the capital last week against alleged corruption in the oil-exporting Gulf Arab state's government.
The protest was held after Kuwaiti daily newspaper al-Qabas reported last month that several local banks were trying to deal with suspiciously large deposits by some parliamentarians and members of their families.
Qabas said that banks have enquired about these amounts and the answers they got from some lawmakers were "not convincing", and could be related to political corruption.
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