Treasury wants companies to hire anti-money laundering officers

The National Treasury now wants financial institutions and designated non-financial institutions to have Anti-Money Laundering Reporting Officers as the government seeks to tighten the leash on illicit financial flows in the country.

This is provided in Regulation No.10 of the Crime and Anti-Money Laundering Regulations of 2023 published by the National Treasury and for which Kenyans have until October 2, by  5pm to submit comments.

Designated non-financial institutions include casinos; real estate agencies; institutions dealing in precious metals and precious stones; accountants who are sole practitioners or partners in their institutions; and non-governmental organizations.

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“A reporting institution shall appoint a Money Laundering Reporting Officer. The Money Laundering Reporting Officer shall be at the management level and shall have necessary and relevant competence, authority and independence. All staff in a reporting institution shall monitor and report to the Money Laundering Reporting Officer any suspicious activity on money laundering, terrorism financing and proliferation financing”, the regulations state.

This comes barely a month after President William Ruto signed into law the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill of 2023. The new law removes the Financial Reporting Centre from the classification of a state corporation, a move expected to grant the centre operational independence.

The new law also empowers both the Capital Markets Authority and the Insurance Regulatory Authority to enforce compliance with the provisions of the Act amongst their licensees, a move that widens the reach of regulatory watchdogs in combating illicit financial flows in the country.

According to the proposed 2023 regulations, the Money Laundering Reporting Officer will be reporting directly to the Financial Reporting Centre. The regulations bar any Chief Executive Officer or Internal Auditor from eligibility for appointment as an Anti-Money Laundering Reporting Officer except in the case where the business is a sole proprietorship.

“The Money Laundering Reporting Officer shall report forthwith to the Financial Reporting Centre any transaction or activity that he has reason to believe is suspicious in a manner the Centre may specify. Where the Centre receives a report made by a Money Laundering Reporting Officer it shall acknowledge receipt of the report forthwith”, the regulations state.  

Tightening controls over anti-money laundering are a key part of Kenya’s ongoing programme with the International Monetary Fund (IMF).

Read: State to legalise phone, email tapping in dirty cash fight

“The End-June 2023 structural benchmark on draft amendments to address legal and regulatory gaps in the Anti-Money Laundering/Combating the Financing of Terrorism framework is on track. The authorities plan to submit to Parliament by the June draft legal amendments to address gaps in the AML/CFT framework to further support anticorruption efforts,” the IMF said in its latest report.

The global money laundering and terrorism financing watchdog, the Financial Action Task Force (FATF), conducted an on-site visit in Kenya between January 31 to February 11, 2022.

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