Kenya Introduces Amendments to Financial Laws to Strengthen Combating of Money Laundering and Terrorism Financing
Enhancing Efforts to Combat Illicit Financial Flows and Strengthen Financial Systems
Nairobi, Kenya - The government of Kenya has recently enacted the Anti-Money Laundering and Combating of Terrorism Financing (AML and CFT) Laws (Amendment) Act, 2023. This amendment aims to strengthen Kenya’s efforts to combat money laundering and terrorism financing, as well as enhance transparency, accountability, and effectiveness in its financial systems.
Significant Changes to Key Laws
The amendments introduce significant changes to several key laws, including:
- Proceeds of Crimes and Anti-Money Laundering Act: Financial groups can now be held culpable for money-laundering offenses.
- Companies Act: Additional compliance requirements have been introduced, including record-keeping requirements for directors, shareholders, and beneficial owners. Private companies with no director resident in Kenya must also appoint a company secretary or contact person.
- Limited Liability Partnership Act: LLPs are required to maintain records of nominee partners and beneficial owners.
- Insurance Act, Capital Markets Act, Banking Act, and Central Bank of Kenya Act: Regulators of financial services players have been granted supervisory powers.
New Requirements and Penalties
Under the new laws, legal professionals are now required to report any suspicious transactions. The reporting threshold has been increased from USD 10,000 to USD 15,000, and penalties for non-compliance have been stiffened.
Broadening Investigative Powers
The Anti-Corruption and Economic Crimes Act has been expanded to include laundering the proceeds of corruption as an economic crime, giving the Ethics and Anti-Corruption Commission (EACC) broader investigative powers.
Enhancing Transparency and Accountability
The amendments aim to enhance transparency, accountability, and effectiveness in the fight against money laundering and terrorism financing. The Financial Reporting Centre (FRC) has been excluded from the purview of the State Corporations Act, ensuring its independence in the fight against money laundering and terrorism financing.
Demonstrating Commitment to International Standards
The amendments demonstrate Kenya’s commitment to adopting internationally accepted standards in combating money laundering and terrorism financing. By strengthening its financial laws and regulations, Kenya aims to protect its economy and financial system from illicit activities.