Financial Crime World

Kenya’s Financial Crimes Definition: Understanding the Mandate of FRC

The Financial Reporting Centre (FRC) is a government institution established under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) 2009 to promote integrity in Kenya’s financial system. The centre plays a crucial role in combating money laundering, terrorism financing, and proliferation financing.

Mandate and Responsibilities

The FRC has several key responsibilities:

  • Combating Money Laundering: The FRC works to prevent the concealment of illegal funds by ensuring that reporting institutions have robust systems and controls in place to detect and report suspicious transactions.
  • Preventing Terrorism Financing: The FRC ensures that financial institutions do not provide services to individuals or entities involved in terrorist activities, thereby disrupting their ability to fund their operations.
  • Proliferation Financing: The FRC works to prevent the financing of illegal weapons and technologies that could be used to harm national security and stability.

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Measures

Compliance with AML/CFT measures is mandatory for reporting institutions under POCAMLA and regulations. This means that:

  • Banks: Are required to put in place robust systems and controls to prevent and detect money laundering and terrorist financing activities.
  • Insurance Companies: Must also have adequate systems and controls in place to prevent and detect such activities.
  • Other Financial Institutions: All financial institutions are required to comply with AML/CFT measures to ensure the integrity of the financial system.

Targeted Financial Sanctions

The government has imposed targeted financial sanctions aimed at preventing the benefit of designated persons or entities from accessing funds or assets. This includes:

  • Asset Freezing: Assets belonging to designated individuals or entities are frozen to prevent them from being made available for illegal activities.
  • Prohibitions: Activities related to the designated individuals or entities are prohibited, disrupting the flow of illicit funds.

Reporting Suspicious Transactions

The FRC requires reporting institutions to submit suspicious or unusual transaction reports to regulatory authorities. This enables law enforcement agencies to take prompt action against financial crimes and protect the integrity of the financial system.

Goal and Objectives

The ultimate goal of the Financial Reporting Centre is to promote the integrity of Kenya’s financial system by combating money laundering, terrorism financing, and proliferation financing. The FRC aims to:

  • Create a Robust Financial Environment: By working together with financial institutions and regulatory bodies, the FRC aims to create a secure financial environment that supports economic growth and stability.
  • Protect National Security and Stability: By disrupting the flow of illicit funds and preventing them from being made available to those who seek to harm Kenya’s national security and stability.