Financial Crime World

Kenya Takes a Significant Step towards Compliance with AMLD5 EU Regulations

Strengthening Anti-Money Laundering and Combating of Terrorism Financing Regime

Nairobi, Kenya - In a move aimed at enhancing its anti-money laundering and combating of terrorism financing (AML/CFT) regime, Kenya has amended several key statutes to align them with the latest international standards.

The Anti-Money Laundering and Combating of Terrorism Financing (AMLCFT) Laws (Amendment) Act, 2023

Key Changes Introduced

  • Increased reporting thresholds from USD 10,000 to USD 15,000
  • Stricter penalties for money laundering offenses, with fines capped at up to 50% of the monetary instrument involved
  • New compliance requirements for companies registered in Kenya, including:
    • Enhanced record-keeping obligations, including records of directors, shareholders, and beneficial owners for a minimum period of ten years
    • Introduction of nominee directors and partners, requiring companies and limited liability partnerships (LLPs) to disclose information about individuals or entities exercising directorship or partnership roles on their behalf

Sector-Specific Amendments

  • Insurance Act: Granting supervisory powers to regulators in the insurance sector
  • Capital Markets Act: Enhancing cooperation between financial services players and regulatory authorities
  • Banking Act: Aligning the law with POCAMLA (Principles of Cooperation Against Money Laundering and Financing of Terrorism) and enhancing cooperation between banks and regulatory authorities
  • Central Bank of Kenya Act: Granting supervisory powers to regulators in the banking sector

Additional Changes

  • The Financial Reporting Centre (FRC) has been excluded from the purview of the State Corporations Act, ensuring its independence and preventing state interference in its operations
  • The definition of economic crimes has been expanded to include laundering the proceeds of corruption, enabling the Ethics and Anti-Corruption Commission (EACC) to investigate such cases more effectively

Conclusion

Kenya’s adoption of these amendments is a significant step towards strengthening its AML/CFT regime and ensuring compliance with international standards. The changes are designed to enhance transparency, accountability, and effectiveness in the fight against money laundering and terrorism financing, and will play an important role in promoting financial stability and integrity in the country.