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NEWS & CURRENT AFFAIRS

The Nairobian

New Act to scrutinise large financial transactions

Business

By - | Dec 04, 2012

By Kenneth Kwama

Companies and individuals transacting money above $10,000 (Sh850,000) will now be scrutinised to ascertain the origin and purpose of the payments.

This follows the coming into effect of a raft of anti-money laundering legislation published by the Financial Reporting Centre (FRC). The Proceeds of Crime and Anti-Money Laundering Act (AML), which necessitated the legislation became effective in June 2010, but only became operational recently when relevant structures were set up at the FRC. The body went ahead and released draft regulations under the Act.

The new legislation also seeks to combat financing of terrorism activities in the country and stipulates significant policy requirements that will affect several sectors of the economy. PricewaterhouseCoopers (PwC) says that implementing the new legislation will help the country to abide by global standards on anti-money laundering, combat financial terrorism and protect Kenya’s reputation as the regional financial hub.

Richard Njoroge, Head of Financial Services sector, PwC Kenya informed a conference organised for businesses in the country last week that the Act has widened reporting institutions to include banks and financial institutions. Money transfer platforms such as M-Pesa and players within the wider financial sector like insurance companies and designated non-financial institutions such as real estate agents, casinos, dealers in precious stones and metals will also be on the radar of the new Act. “Before the Act was enacted, money laundering was not a criminal offence in Kenya.

Keep Reading business

Dealing with proceeds from drugs was covered under the Narcotics Act, and the CBK had an AML guideline for the banking industry, but otherwise there was no comprehensive legal framework on AML. Now with the Act, many more players are affected beyond banks. Entities in the insurance and real estate sectors, dealers of precious stones, forex bureaus and casinos will now have to comply with stringent requirements.