Kenya to amend law to allow tracking of money launderers

The executive plans to submit to parliament draft amendments to the Proceeds of Crime and Anti-Money Laundering Act and Regulations to address gaps in money laundering. These draft amendments will be submitted by end-June 2023.

This follows a raft of commitments by the executive to the International Monetary Fund IMF, that the financial dealings of high-ranking politicians, including the President, and their allies will from next year be tracked, to address money laundering.

The Treasury has told the IMF that the State will track the flow of cash of politically exposed persons, including their bank accounts, to match their known income and their financial dealings.

The Financial Reporting Centre (FRC), the anti-money laundering czar, is preparing changes to the law that will require financial institutions to reveal sources of cash for top politicians, families and business associates.

The proposed amendments to the Proceeds of Crime and Anti-Money Laundering Act and Regulations are aimed at preventing the laundering of illicit proceeds from corruption.

The proposed changes follow a damning report by an international anti-money laundering team that flagged deficiencies in Kenya’s anti-money laundering law on reporting financial transactions done by politically exposed persons’ families and allies.

This was disclosed following the approval of Sh55.07 billion disbursement to Kenya, where authorities will also be expected to prioritize ensuring compliance by banks with enhanced due diligence measures for higher risk customers.

Kenya has a history of multi-billion-shilling scandals that have failed to result in high-profile convictions.

The State scandals often involve bogus tenders and suppliers, despite public servants already required by law to reveal their incomes, bank deposits as well as the wealth of their spouses and children below 18 years.

Kenya will be required to have appropriate risk-management systems in place to determine whether a customer or beneficial owner is a PEP and “take reasonable measures to establish the source of wealth and source of funds”

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Nasra Nanda

Nasra Nanda

Nasra Nanda is a Senior Associate in Dentons Hamilton Harrison and Matthews, a leading law firm in Kenya.

Gregor Pannike

Gregor Pannike

Gregor Pannike is the founder and managing director of Agema Analysts.

Liz Lenjo

Liz Lenjo

Liz Lenjo is the Founder and Managing Consultant of MyIP Legal Studio.

Angela Kioi

Angela Kioi

Angela Kioi is a legal compliance expert, negotiator and ADR practitioner.



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