Financial Crime World

Title: New AML Regulations in Kenya: Reinforcing Financial Crimes Fight with Amended Laws

September 15, 2023, Nairobi, Kenya

Introduction

The Anti-Money Laundering and Combating of Terrorism Financing (AML and CFT) Laws (Amendment) ACT, 2023 was assented into law on September 1, 2023, and came into effect on September 15. This legislation marks a significant step forward in Kenya’s fight against financial crimes as it amends several key statutes to strengthen the AML and CFT framework.

Overview of Key Statutes Affected

The Amendment Act introduces modifications to the following statutes:

  1. Proceeds of Crimes and Anti-Money laundering Act
  2. Companies Act
  3. Limited Liability Partnership Act
  4. Insurance Act
  5. Capital Markets Act
  6. Banking Act
  7. Central Bank of Kenya Act
  8. Anti-corruption and Economic Crimes Act

Proceeds of Crimes and Anti-Money laundering Act

Under the primary statute defining money laundering in Kenya, various amendments have been made:

Financial groups are now regarded as legal persons liable for money laundering-related offenses.

Legal professionals must report any suspicious transactions.

Raised Reporting Threshold

The reporting threshold for suspicious transactions has been increased from KES 1 Million to KES 1.5 Million.

Increased Penalties

Penalties have been increased to 50% of the monetary instrument involved, up from the previous penalty of 10%.

Companies Act

The Amendment Act introduces several compliance requirements for companies registered in Kenya:

Extended Record Keeping

Companies must maintain information on directors, shareholders, and beneficial owners for a minimum of ten years from the date they cease to hold these positions.

Recognition of Nominee Directors

The Amendment Act defines a nominee director and requires companies to keep a register of nominee directors, including their particulars and the person nominating them. The register is not accessible to the public.

Company Secretary or Contact Person for Private Companies

Private companies with no director resident in Kenya must designate either a company secretary or a contact person with permanent residence in the country. The contact person will maintain records of directors, shareholders, beneficial owners, and act as a liaison to government authorities when requested.

Post-Striking Off Record Keeping

Records of a struck-off company must be kept for at least seven years from the date it is removed from the register.

Conclusion

With these amendments aimed at increasing transparency, accountability, and effectiveness in the war against financial crimes, Kenya fortifies its commitment to international AML and CFT standards.