Prior to the enactment of the Proceeds of Crime and Anti-Money Laundering Act in December 2009, Anti-Money Laundering initiatives in the country were spearheaded by the National Taskforce on Anti-Money Laundering and Combating the Financing of Terrorism (NTF). The NTF is a multi-disciplinary Taskforce comprising various government ministries, agencies and departments and was established through a gazette notice in 2003. Kenya’s Anti-Money Laundering regime is largely contained in The Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA).
II. Overview of The Proceeds of Crime and Anti-Money Laundering Act, 2009
The Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA) was enacted on December 10, 2009 and came into operation on June 28, 2010. The Act criminalizes money laundering activities; provides mechanisms for freezing, seizing and confiscating of proceeds of crime; and stipulates obligations for Reporting Institutions which include Financial Institutions and Designated Financial Businesses and Professions. The Act also establishes various organs necessary to combat money laundering. These include, the Anti-Money Laundering Advisory Board, the Financial Reporting Centre (Kenya’s Financial Intelligence Unit), the Asset Recovery Agency and the Criminal Assets Recovery Fund.
III. The Anti-Money Laundering Advisory Board (AML Board)
The Anti-Money Laundering Advisory Board (AML Board) is established under section 49 of POCAMLA. The Board’s mandate under the Act is to advise the Director of the Financial Reporting Centre (FRC) generally on the performance of his functions and the exercise of his powers under the Act. The Board was officially launched by the Deputy Prime Minister and the then Minister for Finance on 24th June 2011. Its membership comprises,
The Permanent Secretary, Treasury;
The Attorney General;
The Governor, Central Bank of Kenya;
The Inspector General of Police;
The Chairman, Kenya Bankers’ Association (KBA);
The Chief Executive Officer, Institute of Certified Public Accountants of Kenya (ICPAK);
Director of the Financial Reporting Centre who is also the Secretary to the Board; and
Two other persons who have knowledge and expertise in matters relating to money laundering to represent the private sector. Mr. John Wanyela and Mrs. Sheila M’Mbijewe were appointed by the Minister to represent the private sector as provided by section 49 (1) (h) of the Act. The two private sector representatives were subsequently gazetted on 2nd September 2011. Mr. Wanyela was also appointed and gazetted as the Chair of the Board.
IV. The Financial Reporting Centre (FRC)
The Financial Reporting Centre (FRC) (Kenya’s Financial Intelligence Unit) is established by Section 21 of POCAMLA. It is an independent body whose principal objective is to assist in the identification of the proceeds of crime and combating money laundering.
The other objectives of the FRC are to:
Make information collected by it (FRC) available to investigating authorities and supervisory bodies to facilitate the administration and enforcement of the laws of Kenya
Ensure compliance with international standards and best practice in anti-money laundering measures;
Exchange information on money laundering activities and related offences with similar bodies in other countries.
FRC’s Powers and Functions
Under POCAMLA, the FRC has extensive functions and powers. These include:
i. Implementation of registration system for Reporting Institutions;
ii. Receipt and analysis of reports of unusual or suspicious transactions and cash transaction reports made by Reporting entities as well as cash declaration forms received from border points;
iii. Dissemination of Reports received under the Act to appropriate law enforcement authorities or other supervisory body for further handling;
iv. Undertaking inspection and supervision of reporting institutions to ensure compliance with AML/CFT reporting obligations as prescribed in POCAMLA;
v. Facilitating exchange of information on money laundering activities with other financial intelligence units in other countries;
vi. Formulating policies on anti-money laundering in consultation with the Board.
vii. Developing AML/CFT Regulations to provide guidance to support implementation of the Act;
viii. Developing AML/CFT training programs for reporting institutions.
ix. Compiling of statistics and records;
x. Dissemination of information within Kenya or elsewhere, and make recommendations arising out of any information received;
xi. Issuing guidelines to reporting institution and advising the Minister;
xii. Creation and maintenance of a database of all reports of suspicious transactions, related Government information and such other materials as the Director may from time to determine to be relevant to the work of the Centre.
Mission, Vision and Values
To be the leader in financial intelligence works in the region and be recognized worldwide as an FRC that adheres to international standards
To protect the integrity of our financial system and contribute to the safety of our citizens through deterrence of money laundering and terrorist financing.
The values of the Centre provide the platform for its future success. The Centre seeks to ensure that all staff incorporate and utilize these values as a reference for all of their work and activities. To this end, all of the Centre’s staff will:
In the spirit demonstrate integrity in everything that we do (with amongst others, respect, honesty, trust, discipline, humility and loyalty)
Demonstrate pride and discipline in our work, accepting accountability and being prepared to ‘go the extra mile’
Strive for excellence and professionalism by effectively making a difference in executing our mandate by offering solutions, while not presenting problems only;
Value individuals and allow space for creativity and growth;
Optimize our relationship with stakeholders and partners; and
Ensure the security of organizational assets and information