Financial Crime World

Kenya Strengthens Anti-Money Laundering Regulations to Combat Financial Crimes

Nairobi - In a significant move to combat financial crimes, Kenya has strengthened its anti-money laundering (AML) regulations by introducing amendments to various laws, effective September 15.

Key Amendments

  • The Anti-Money Laundering and Combating of Terrorism Financing (Amendment) Act, 2023, introduces amendments to nine laws:
    • Proceeds of Crimes and Anti-Money Laundering Act
    • Companies Act
    • Limited Liability Partnership Act
    • Insurance Act
    • Capital Markets Act
    • Banking Act
    • Central Bank of Kenya Act
    • State Corporations Act
  • The amendments aim to combat illicit financial flows, enhance customer due diligence in financial markets, improve record keeping and reporting of suspicious transactions.

New Requirements

  • Financial institutions will be required to report suspicious transactions exceeding $15,000, up from $10,000 previously.
  • Legal professionals are now compelled to report any suspicious transactions.
  • Companies must keep records of directors, shareholders, and beneficial owners for at least 10 years after they cease to be associated with the company.
  • Limited Liability Partnerships (LLPs) registered in Kenya must keep records of nominee partners and beneficial owners for at least 10 years.

Enhanced Transparency and Accountability

  • Insurance companies, capital markets players, and banking institutions are subject to new regulations aimed at enhancing transparency and accountability.
  • The Financial Reporting Centre has been excluded from the purview of the State Corporations Act, ensuring its independence and preventing state interference in its critical role in combating money laundering and terrorist financing.

Expanding the Definition of Economic Crimes

  • Kenya’s commitment to AML and CFT is evident in the expansion of the definition of economic crimes to include laundering the proceeds of corruption.
  • The Ethics and Anti-Corruption Commission can now investigate proceeds of corruption that have been laundered, extending its mandate.

Conclusion

The amendments collectively aim to enhance transparency, accountability, and effectiveness in the fight against money laundering and terrorism financing. As Kenya forges ahead with these measures, it is clear that the country is committed to adopting internationally acceptable standards to combat financial crimes.