Financial Reporting Centre set to commence operations

 By James Anyanzwa

The Anti-Money Laundering Advisory Board (AML Advisory Board) has approved the immediate operationalisation of the Financial Reporting Centre (FRC).

The boardfs chairman John Wanyela said the Ministry of Finance and Central Bank had agreed to provide office space and second staff to the FRC on an interim basis.

The FRC has been established pursuant to Section 21 of the Proceeds of Crime and Anti-Money Laundering Act 2009.

Wanyela said the centre will identify proceeds of crime and combat money laundering.

He said the centre will operationalise the Proceeds of Crime and Anti-Money Laundering Act and receive and analyse reports of unusual or suspicious transactions that may be associated with money laundering and forward them to appropriate law enforcement authorities for action including prosecution.

"FRC shall also develop anti-money laundering policies in consultation with the AML Advisory Board," said Wanyela.

Kenya recently joined its East African Community (EAC) member States in the fight against money laundering by enacting a legislation that is meant to go a long way in curbing the vice.

Kenyafs Proceeds of Crime and Anti-Money Laundering (AML) Act, which was signed in December 2009 and came into effect on June 28, 2010, aims to identify, trace, freeze as well as seize proceeds of crime.

The AML Law seeks to establish a Financial Reporting Centre and Assets Recovery Agency to criminalise money laundering and further require reporting institutions to take measures to help combat money laundering.

Tanzania, Rwanda and Burundi put in place such legislation. Uganda is expected to enact the same in the 2010/2011 financial year. Tanzania has had its AML Law since 2006.

The Act ensures Kenyafs compliance with anti-money laundering standards set by the Financial Action Task Force on Money Laundering, an intergovernmental body that fights money laundering and terrorist financing globally.

The lawfs enactment is being lauded as a positive move by players in the countryfs banking and financial services sector, who see it as a key step in the fight against money laundering in the region.

The AML Act requires financial institutions to maintain accurate records for a minimum of seven years, with details such as name, physical and postal address for each person conducting transactions with the financial institutions being recorded.

The Act further requires financial institutions to submit suspicious transactions (STRs) and Cash Threshold Reports to the Financial Reporting Centre, with the reports being used to facilitate the gathering of financial intelligence for analysis purposes.

Previously, no verification of sources of funds coming into the countryfs formal financial system was necessary, but the AML Law now requires forex bureaus and other money transfer and financial institutions to identify customers and report any transaction of more than $10,000 in hard currency.

Additional reporting By John Oyuke.