Title: Central Bank of Kenya’s New AML Guidelines for Mobile Payment Services: Key Points
Central Bank of Kenya Introduces New AML Guidelines for Mobile Payment Services
The Central Bank of Kenya (CBK) has issued new Anti-Money Laundering (AML) guidelines for Mobile Payment Services (MPS) providers in Kenya. These guidelines, which are a legal requirement under the National Payment System (Anti-Money Laundering Guidelines for the Provision of Mobile Payment Services) 2013, are geared towards mitigating the risks of money laundering and terrorist financing in the mobile payment system.
Scope of the New AML Guidelines
All mobile payment transfers made within Kenya are subject to these AML requirements. The guidelines apply to all mobile payment service providers licensed under the Kenya Communications Amendment Act, 2009, and authorized by the CBK to offer payment services.
Prohibited Activities
Mobile payment service providers and their agents are required to:
- Knowingly transmit or receive monetary instruments or anything of value with the intent to commit an offense.
- Enter into arrangements that facilitate the acquisition, retention, use, or control of criminal property.
Risk Management
To reduce the risk of mobile payment products being used for money laundering or terrorist financing, mobile payment service providers and their agents must:
- Set transaction and payment account limits.
- Implement measures to verify customers’ identity.
- Link different accounts held by a single account holder.
- Maintain records of transactions and store them for a minimum of seven years.
- Establish and enforce operational procedures and controls.
Handling and Resolution of Customer Complaints
Mobile payment service providers and their agents are responsible for managing operational risks through laid-down procedures and controls. They must handle and resolve customer complaints effectively.
Penalties
Failure to comply with the new AML guidelines and failure to keep records of clients’ identity and details of transactions performed through the payment instrument is an offense.
Reporting of Suspicious Transactions
Under the new guideline, a nominating officer or person authorized by the director of the Financial Reporting Centre must receive authorized disclosures:
- Before an alleged offender carries out a prohibited act.
- After the act, but upon a good reason for the mobile payment service provider’s failure to make the disclosure beforehand.
The CBK may prescribe the form and manner of disclosures and additional information necessary for the person to whom the disclosure is made to start a money laundering investigation.
Effective Date and Transition Period
The new guidelines take effect _________. Mobile payment service providers who were in operation before the effective date are allowed a period of 12 months to comply with the new requirements. The CBK may dispense with any requirement of these guidelines with which the Mobile Payment Service Providers had complied prior to the effective date.