This archive report was first published on 2 October 2019.
Published on October 2, 2019, Kenya's financial sector is at risk of being declared a hub for money laundering after Parliament failed to amend the Proceeds of Crime and Anti-Money Laundering Act.
The proposed amendments aimed to designate lawyers, notaries, and other independent legal professions as part of reporting entities to whom anti-money laundering/combating financing of terrorism (AML/CFT) controls would apply.
However, MPs failed to pass the amendments, leaving Kenya vulnerable to being cited by the FATF for non-compliance, which could lead to sanctions.
According to Saitoti Maika, the Financial Reporting Centre (FRC) boss, the risk of Kenya being singled out as a high-risk jurisdiction and a perceived safe haven for money laundering/terrorism financing is real.
"Where the FATF deems a country not to be fully implementing the FATF standards, it can call upon the international community to apply counter-measures on that country," Mr. Saitoti said.
He added that this could erode Kenya's financial sector market reputation and asked whether the country wishes to earn this tag.
The proposed amendments were expected to provide a legal basis for lawyers to report suspicious transactions to the FRC.
Kenya is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which aims to combat money laundering, terrorism financing, and proliferation of weapons of mass destruction.
As part of its enhanced follow-up procedures, ESAAMLG may refer its members to the FATF for inclusion in the FATF's International Cooperation Review Group process.
