Financial Crime World

Kenya’s Anti-Money Laundering Regulations, 2023: New Measures to Bolster Compliance

The Kenyan government has issued new regulations under the Proceeds of Crime and Anti-Money Laundering Act, 2009 to strengthen the financial sector’s AML/CFT (Anti-Money Laundering and Counter-Terrorism Financing) framework.

Table of Contents

Preliminary

The regulations begin with:

  • Citation
  • Interpretation
  • Application They also apply to measures for combating terrorism financing and the financing of weapons of mass destruction.

The Financial Reporting Centre

The Centre’s functions are expanded to include:

  • Registration system for reporting institutions
  • Supervision and enforcement of compliance with the Act and its guidelines

Obligations of a Reporting Institution

Reporting institutions must adhere to:

  • Risk assessment
  • New technologies
  • Customer due diligence requirements
  • Client identification and verification
  • Ongoing monitoring

Due Diligence Requirements

Customer due diligence measures require reporting institutions to:

  • Identify and verify clients’ identity
  • Understand intended nature and purpose of business relationships
  • Scrutinize transactions

Reporting Requirements

Institutions must report:

  • Cash transactions exceeding a specified threshold
  • There are provisions against tipping off and record-keeping requirements

General Provisions

The regulations include provisions:

  • Power of the Centre to issue directives and guidelines
  • Sharing of information
  • Mechanisms for the suitability of financial institutions

In conclusion, the new anti-money laundering regulations in Kenya aim to:

  • Enhance existing AML/CFT framework
  • Introduce stricter measures
  • Prevent money laundering, terrorism financing, and financing of weapons of mass destruction Compliance with these regulations is expected to become a priority for reporting institutions, as they face stricter penalties for non-compliance.