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The Anti-Money Laundering and Combating of Terrorism (AML/CFT) Financing Laws (Amendment) Act, 2023 signed into law in September is an important step to align Kenya’s AML/CFT laws with international standards set by the Financial Action Task Force (FATF).
According to an analysis done by PwC Kenya’s advisory services team, the Act updates provisions across 16 different Acts. The main goal is to address the lack of a consistent legal and institutional framework for AML/CFT across various sectors.
Here are some of the major changes in each act:
Proceeds of Crime and Anti-Money Laundering Act (POCAMLA)
- Definitions: The scope of POCAMLA has been expanded to include terrorism financing (TF) and proliferation financing (PF) along with money laundering.
- Legal Professionals: Law Society of Kenya (LSK) is now a self-regulatory body responsible for reporting suspicious transactions related to lawyers, notaries, and other independent legal professionals.
- Reporting Provisions: Penalties have been increased, reporting timelines for suspicious transactions have been reduced, and the reporting threshold has been raised.
- Risk-based Approach: FRC and supervisory bodies must adopt a risk-based approach, focusing on higher-risk countries and considering materiality and risk when conducting due diligence.
Central Bank of Kenya Act, Microfinance Act, Banking Act, National Payment Systems Act, Insurance Act, and Capital Markets Authority Act
These acts now include increased AML/CFT/CPF supervisory mandates for the Central Bank of Kenya, Insurance Regulatory Authority, and Capital Markets Authority.
State Corporations Act
The Financial Reporting Centre (FRC) is no longer considered a State Corporation, allowing for more operational independence.
Anti-Corruption and Economic Crimes Act
Money laundering is now classified as an economic crime.
Companies Act
Companies are now required to provide beneficial ownership information upon registration and maintain this information for at least ten years. Public listed companies must also update their beneficial ownership information.
Limited Liability Partnership Act
Limited Liability Partnerships (LLPs) must now provide beneficial ownership information upon registration and maintain a register of nominee partners.
Prevention of Terrorism Act
New offenses have been added, such as “proliferation act” and “financing of proliferation act.” There are also new penalties for legal persons who violate the provisions of the act, and a CFT Inter-Ministerial Committee has been established.