Kenya Enhances Compliance with Anti-Terrorist Financing Regulations

Kenya has introduced significant amendments to its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Act 2023, aimed at strengthening its efforts in combating terrorism financing.

Key Changes

• The scope of money laundering has been expanded to include terrorism and proliferation financing, reflecting the evolving nature of financial crimes.
• Supervisory bodies have increased mandates to combat anti-money laundering, counter-terrorism financing, and proliferation financing.
• A risk-based approach is now emphasized by the Financial Reporting Centre (FRC) and regulatory authorities for detecting and preventing money laundering, terrorist financing, and proliferation financing.

Risk-Based Approach

• Financial institutions are required to conduct thorough due diligence on clients and transactions, taking into account factors such as materiality and risk.
• This approach ensures that financial institutions prioritize their efforts on high-risk transactions and clients.

Designation of Self-Regulatory Bodies

• The Law Society of Kenya has been designated as a self-regulatory body responsible for receiving suspicious transaction reports from law firms and channeling them to the FRC.
• The FRC has also been granted operational independence from the State, embedded in the State Corporations Act.

Increased Beneficial Ownership Requirements

• Companies and limited liability partnerships are now required to comply with increased beneficial ownership requirements by October 31st this year.

Expansion of Economic Crime Definition

• The definition of economic crime under the Anti-Corruption and Economic Crimes Act has been expanded to include money laundering activities.

Conclusion

The amendments aim to enhance Kenya’s ability to combat financial crimes and protect its financial system from abuse. The PwC newsletter provides a comprehensive overview of the changes and can be downloaded for further information.