Financial Crime World

Kenya Upgrades AML/CFT Regulations to Enhance Financial Transparency and Combat Money Laundering and Terrorism Financing

Introduction

The Kenyan government has recently passed the Anti-Money Laundering and Combating of Terrorism Financing (AML/CFT) Laws (Amendment) ACT, 2023, aimed at strengthening the country’s financial regulatory framework and combating illicit financial flows.

Key Changes and Requirements

  • New requirements for financial institutions, companies, and limited liability partnerships to maintain records and report suspicious transactions
    • Introduces penalties for non-compliance
    • Increases reporting threshold from USD 10,000 to USD 15,000
  • Supervisory powers granted to regulators of financial services players, including:
    • Insurance Regulatory Authority
    • Capital Markets Authority
    • Central Bank of Kenya
  • New concept of nominee directors and partners:
    • Companies and limited liability partnerships must maintain registers of these entities
  • Requirements for private companies without a resident director in Kenya:
    • Must appoint either a company secretary or a contact person with permanent residence in Kenya

Independent Oversight

  • The Financial Reporting Centre is exempt from the purview of the State Corporations Act, ensuring its independence and preventing state interference.

Expanded Definition of Economic Crimes

  • The definition of economic crimes now includes laundering the proceeds of corruption:
    • Extends the mandate of the Ethics and Anti-Corruption Commission to investigate money laundering related to corruption

International Recognition and Commitment

  • Kenya’s commitment to AML/CFT has been praised by international organizations, with the country’s efforts aimed at enhancing transparency, accountability, and effectiveness in the fight against money laundering and terrorism financing.
  • The amendments demonstrate Kenya’s continued dedication to adopting internationally acceptable standards in combating financial crimes and promoting a stable and secure financial environment for its citizens and investors.

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