Lawyers to Report Clients on Suspicious Money Sources

Starting in March, lawyers in Kenya will start reporting suspicious money transactions to the Financial Reporting Centre (FRC) to combat money laundering in Kenya.

The recently enacted Anti-Money Laundering and Combating of Terrorism Financing (Amendment) Bill, 2023 will come into effect on March 15, 2024, extending reporting obligations to law firms.

Currently, financial institutions are required to maintain records of cash transactions exceeding Ksh.1.5 million and promptly report any suspicious deals to the FRC.

This agency is tasked with identifying and addressing money laundering and terrorism financing.

Financial Action Task Force Push

The Financial Action Task Force (FATF), a global body dedicated to combating illicit financial activities, is actively working to curb transnational money laundering crimes.

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“We are closing gaps in our anti-money laundering laws and strengthening measures against money laundering and illicit financing,” said Saitoti Ole Maika, the FRC director-general.

Under the new Bill, lawyers are obligated to submit details of financial transactions to the FRC starting from March 15, 2024.

This move resolves a stalemate that had implications for Kenya’s access to loans from the International Monetary Fund (IMF).

IMF Push on Anti-Money Laundering

It is among the conditions the multilateral lender had put in place for Kenya under the reign of former President Uhuru Kenya, in a major fight against corruption and money laundering activities.

The FRC and the Law Society of Kenya (LSK) reached an agreement last year, paving the way for the implementation of a law compelling lawyers and their staff to disclose suspicious financial dealings involving clients.

“As we tighten the noose on banks, we must also bring these entities under the scrutiny of the FRC,” added Maika on the need to extend control over trusts and companies:

He acknowledged the fact that “there is no ‘wash wash’ activity happening without lawyer involvement.”

Reports indicate that Prominent lawyers are allegedly engaged in an estimated Ksh.3.3 billion gold export enterprise.

In 2019, Members of Parliament approved amendments to the Proceeds of Crime and Anti-Money Laundering (Amendment) Act to compel lawyers to start disclosing suspicious financial deals involving their clients.

At the time, the lawyers, through Nairobi-based lawyer Omwanza Ombati, moved to court, arguing the changes to the Act were harmful to legal practice.

Section 2(c) and section 14 (b) of the Proceeds of Crime and Anti-Money Laundering Act make the advocates and their employees, including accountants, clerks and cleaners, reporting agents of the FRC.

The Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2023 seeks to amend section 36 of the principal Act to ensure that the LSK regulates, supervises and enforces compliance for anti-money laundering (AML), combating the financing of terrorism (CFT), and countering proliferation financing (CPF) for lawyers, notaries and other legal professionals.

Monitor Your Business Transaction

Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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