(Mar. 24, 2017) On March 3, 2017, the Kenyan President, Uhuru Kenyatta, signed into law the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill. During the signing ceremony, he reportedly noted that “[t]his is a major tool in our sustained efforts to fight corruption. It means that no proceeds of theft and corruption are beyond the reach of the State.” (Maryanne Gicobi, Kenyan President Signs Anti-Money Laundering Bill to Law, EAST AFRICAN (Mar. 3, 2017).) At present it appears that the latest available version of the amendment bill is one that was published in 2015; it is unclear whether the newly adopted law has further revisions. Therefore, references to the changes in the law are to the 2015 Amendment Bill on the assumption that those changes were adopted.
Based on the 2015 amendment bill, the 2017 amendment would strengthen the authority of the Financial Reporting Centre (FRC) to issue instructions, directions, and rules. (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, KENYA GAZETTE SUPPLEMENT, No. 190 (Nov. 26, 2015), Institute of Certified Public Accountants of Kenya (ICPAK) website.) The Proceeds of Crime and Anti-Money Laundering Act of 2009 established the FRC mainly to assist “in the identification of the proceeds of crime and the combating of money laundering and the financing of terrorism.” (Proceeds of Crime and Anti-Money Laundering Act, No. 9 of 2009, § 23 (June 28, 2010), Laws of Kenya website.) A 2012 amendment to the Act accorded the FRC the authority to issue “such instructions, directions, guidelines or rules to reporting institutions as it may consider necessary for the better carrying out of its functions.” (Proceeds of Crime and Anti-Money Laundering (Amendment) Act, No. 51 of 2012, § 9, KENYA GAZETTE SUPPLEMENT, No. 215 (Jan. 4, 2013), Laws of Kenya website.)
The Amendment Bill would strengthen this authority by affording the FRC the power to impose civil penalties against persons (both natural and juridical) who defy its authority. Specifically, in addition to other forms of penalty envisaged under the 2009 Act, the Amendment Bill states that a natural person who “fails to comply with any instruction, direction or rules issued by the [FRC] … shall be liable on conviction to a fine not exceeding 5 million shillings (KES)” (about US$48,590). (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, § 4.) A similar violation by a juridical person is, on conviction, subject to a fine not exceeding KES25 million (about US$242,955). (Id.) If the violation is not remedied, the person responsible is liable to pay KES10,000 (about US$97) per day for up to 180 days. (Id.)
The Amendment Bill also expands the category of persons that fall under the authority of the FRC. It does this by clarifying the definition of the term “reporting institutions.” The Proceeds of Crime and Anti-Money Laundering Act of 2009 defined the term “reporting institution” as “a financial institution and a designated non-financial business and profession.” (Proceeds of Crime and Anti-Money Laundering Act No. 9 of 2009, § 2.) The Amendment Bill further defines the term “designated non-financial businesses or professions” to include:
- casinos (including online casinos);
- real estate agencies;
- those dealing in precious metals;
- those dealing in precious stones;
- non-governmental organizations; and
- any business or profession that the Minister of Finance, on the advice of the FRC, deems vulnerable to money laundering. (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, § 2.
The Amendment Bill also accords the FRC additional, significant powers. It authorizes the institution to issue an order barring an individual from employment within a a particular reporting institution or employment in a specific capacity. (Id. § 4.) It also permits the FRC to issue an order “to a competent supervisory authority requesting the suspension or revocation of a licence or registration of a specified reporting institution whether entirely or in a specified capacity or of any employee of the reporting institution.” (Id.)