Politics and policy
Githae seeks more powers to monitor money laundering
Posted Sunday, June 17 2012 at 16:13
The government is proposing increased checks on financial intermediaries as it seeks to control money laundering by empowering regulators to access records.
The Financial Reporting Centre, which monitors anti-money laundering activities, will, if a Bill published by the Finance minister Njeru Githae goes through, compel institutions to produce documents on questionable transactions.
Financial intermediaries have relied on the law that only requires them to submit reports suspicious transactions (STRs) and Cash Threshold Reports to the Centre.
In addition to providing these reports used to gather intelligence for analysis, the financial institutions will now be required to release such records.
“The centre will have the power to compel the production or access to all records relevant to monitoring compliance,” reads part of the Bill to amend the Proceeds of Crime and Anti-Money Laundering (AML) Act, 2009 appearing in a special issue of the Kenya Gazette dated June 14.
It amendment will also expand the financial instruments to include cheques and other negotiable instruments, not just notes and coins.
Kenya has witnessed an increase in financial inflows that are not accounted for in the balance of payments raising suspicion on the source of the money.
The Anti-Money Laundering Advisory Board approved the immediate operationalisation of the Financial Reporting Centre (FRC) in April this year.
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.
Kenya had been under pressure from its East African Community (EAC) member States in the fight against money laundering who had earlier enacted a legislation that is meant to go a long way in curbing the vice.
The Proceeds of Crime and Anti-Money Laundering (AML) Act that came into effect 2010 helps in identifying, freezing and seizing proceeds of crime.
The law ensures Kenya’s compliance with anti-money laundering standards set by the global Financial Action Task Force on Money Laundering, an intergovernmental body that fights money laundering and terrorist financing.
The Act requires financial institutions to maintain accurate records for a minimum of seven years, showing names, addresses of people transacting business with the financial institutions.