Govt Creates Agency, Approves Bill In War Against Wash Wash Suspects

When enacted into law, the amendment Bill will strengthen the country's anti-money laundering and anti-terrorism financing regulations in line with global standards set by the Financial Action Task Force (FATF).

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Jul 18, 2023 - 16:51
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Govt Creates Agency, Approves Bill In War Against Wash Wash Suspects
An image of a bundle of notes. /FILE

The Cabinet on Tuesday, July 18 took an extra step in reeling in individuals in Kenya involved in money laundering and those holding offshore accounts in foreign nations following the approval of the draft Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill 2023. 

With this approval, the Financial Reporting Centre (FRC), a government agency, will be tasked with spearheading the crackdown on the aforementioned Kenyans fond of participating in the wash-wash business.

If enacted by Parliament, FRC, the anti-money laundering agency, will have the power to show the instances under which it might request the revocation of a reporting institution’s license.

The FRC will also have the authority to impose sanctions on those found guilty of proceeds of crime.

President William Ruto chairing a Cabinet meeting at State House on June 27, 2023. /PCS

The Amendment Bill proposes legal and policy reforms to address technical compliance deficiencies identified in Kenya's second Anti-Money Laundering and Counter-Terrorism Financing Mutual Evaluation Report by the Eastern and Southern Africa Anti-Money Laundering Group.

When enacted into law, the amendment Bill will strengthen the country's anti-money laundering and anti-terrorism financing regulations in line with global standards set by the Financial Action Task Force (FATF).

FATF is an inter-governmental organisation with the mandate to set global standards to promote the effective implementation of legal, regulatory and operational measures in combating the three transnational vices laundering, terrorism financing and weapons of mass destruction financing.

"The Bill comprehensively reviews laws related to anti-money laundering, anti-terrorism financing and counter-financing of the proliferation of weapons of mass destruction.

"The proposed amendments introduce several measures to detect and prevent money laundering activities in Kenya, including the supervision and enforcement of terrorism financing, reporting of suspicious transactions, transparency of beneficial ownership and combating terrorism financing," stated State House Spokesperson Hussein Mohamed in part on Friday, July 7.

Some of the measures to detect and prevent money laundering activities in Kenya listed in the bill include; supervising and enforcing terrorism financing, reporting suspicious transactions, transparency of beneficial ownership, and combating terrorism financing.

The amendments introduced stricter penalties for individuals and entities found guilty of money laundering offences. This includes higher fines and extended prison terms that are expected to act as strong deterrents against illicit financial activities.

In February 2023, Treasury Cabinet Secretary Njuguna Ndung'u gave the Kenya Revenue Authority (KRA) access to crucial data on secret bank accounts held by Kenyans in 106 foreign countries.

Other Cabinet Approvals

During the same Cabinet meeting on July 18, the Cabinet approved the introduction and accreditation of Bridging courses. In this new move, which seeks to enhance access to quality university education, the Ministry of Education will develop guidelines to support the implementation of the courses.

The Cabinet also gave a nod to a Tree Planting and Nurturing Programme in learning institutions across the country. Led by the Ministries of Education and Environment, Climate Change and Forestry, this initiative will be tasked with the Government's tree planting and restoration to achieve 30 per cent tree cover by 2030.

The programme will establish tree nurseries in more than 45,000 schools, engaging millions of learners and teachers to plant and nurture trees.

Further, the Cabinet approved the Climate Change (Amendment) Bill, signalling Kenya's commitment to strengthening its involvement in carbon markets.

Kenya has been actively participating in carbon markets for over 20 years, contributing to sustainable development and technology transfer. However, the absence of a legal framework has created regulatory uncertainty, hindering full market engagement.

President William Ruto waters a seedling in Molo, Nakuru County on July 2, 2023. /PCS

The Bill is expected to address these challenges by legislating on carbon markets, controlling and managing trading activities. It aligns with international commitments under the Paris Agreement and demonstrates Kenya's dedication to fostering a sustainable low-carbon future.

The Cabinet also approved the Acquisition of Kenya Petroleum Refineries by the Kenya Pipeline Company Limited.

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