Report on mobile cash laundering risks to be released April


Financial Reporting Centre director-general Saitoti Ole Maika. FILE PHOTO | NMG

An anti-money laundering report that will form the basis of expanding the current Sh300,000 daily cap on mobile money is ready and will be released next month.

The Financial Reporting Centre says the findings of the assessment, which started in March 2019 to identify threats to the integrity of Kenya’s financial system are now ready to be made public.

FRC has been coordinating a team tasked with setting standards and promoting the development of legal, regulatory and operational measures to combat money laundering and terrorist financing.

“We have covered (the risks posed by mobile-money network) under the national risk assessment report and we are planning to release it next month,” FRC director-general Saitoti Ole Maika said via telephone.

“The report will have all the indicators of the risks per product and per sector.”

The task force draws membership from security agencies, immigration authorities, the Judiciary as well as regulators for banks, Saccos, the real estate and the gaming industry.

Members include the Central Bank of Kenya, Kenya Revenue Authority, Directorate of Criminal Investigations, Capital Markets Authority, Asset Recovery Agency and Office of the Director of Public Prosecutions.

Besides mobile money transactions, the report of the task force will also make public the threats posed by other actors such as financial institutions, second-hand car dealers, advocates, casinos, accountants and real estate agents in the fight against money laundering.

International organisations — including the US State Department— have in the past warned that while the mobile money platforms have made Kenya a key financial hub, the channels are “vulnerable to money laundering activities”.

The CBK was prior to the onset of the Covid pandemic, which led to increased digital transactions, reluctant to increase the previous Sh140,000 daily limit for mobile money transactions due to concerns that the platforms may be used to launder money and finance terrorist activities.

Besides more than doubling the daily transaction ceiling to Sh300,000 from Sh140,000, the CBK allowed customers to hold a maximum of Sh300,000 in their wallets, a steep jump from Sh100,000 previously.

Mobile money channels were also a focus for international assessors under the Eastern and Southern Africa Anti-Money Laundering Group who between last September and February conducted a second evaluation on Kenya’s compliance with international standards on combating dirty cash dealings.

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