BY Nigel Shaw AND Jean Makaka
The Proceeds of Crime and Anti-money Laundering (Amendment) Bill 2021
The Proceeds of Crime and Anti-money Laundering Bill (the “Bill”) gazetted on 03 September 2021 seeks to amend the current Proceeds of Crime and Anti-money Laundering Act, 2009 (the “Act”). The Bill proposes to introduce a number of changes targeted towards countering the current money laundering problem in Kenya.
The Bill provides for the removal of the position of deputy director of the financial reporting centre (the “Centre”) in a bid to align the Act with the prevailing practice of not having deputy chief executives of state corporations.
The Bill expands the definition of “reporting persons” under the Act. This will now include: advocates, notaries and other independent legal professionals who are sole practitioners, partners or employees within professional firms so that the obligations to monitor complex unusual, suspicious, large or other transactions and to report any transactions that constitute or may be related to money laundering as provided under Part IV of the Act apply to them.
The Bill proposes that the obligations shall apply to the abovementioned parties while acting for their clients in the following circumstances:
- buying and selling of real estate;
- managing of client money, securities or other assets;
- organisation of contributions for the creation, operation or management of companies; and
- creation, operation or management of buying and selling of business entities.
In addition, the Bill seeks to give the Centre the authority to interrupt a transaction for not more than five working days where there is evidence of suspicious activity taking place. This will allow the Centre adequate time to investigate the transaction. The Bill also seeks to introduce provisions that will limit the right to privacy enshrined in the Constitution of Kenya, 2010 in relation to the prevention, detection and investigation of money laundering and financing of terrorism.
Further, the Bill proposes the introduction of the asset recovery oversight board (the Board). The function of the Board will include advising and overseeing the asset recovery agency (the Agency) on:
- the exercise of its powers,
- performance of its functions,
- asset recovery policies,
- strategic priorities and
- the administration of the Agency.
The Board will hold the Agency accountable and will have the authority to constitute committees to ensure that this mandate is achieved.
The Bill is currently undergoing the legislative process and should be tabled for the first reading in parliament and thereafter public participation.
Kenya is considered one of the major money laundering jurisdictions across the globe. The Bill seeks to strengthen the current legislation around money laundering in the country by widening the scope of reporting requirements, addressing loopholes that have previously been used by money launderers in the past and is intended to improve vigilance in the financial sector. However, there is widespread concern as to the effect of the proposed amendments on several legal principles, practices and laws including client confidentiality, constitutional rights and criminal law principles and procedures.
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