Anti Money Laundering (AML) in Kenya
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|With a long history of corruption, Kenya’s money laundering problem has grown more significant as the country has become a major financial hub for East Africa. Kenya has come under increasing pressure to implement Anti-Money Laundering (AML) laws in the face of rising crime posed by the drug traffickers, international terrorists, and illicit arms traders operating in the country.
In May of 2008, the Proceeds of Crime and Anti-Money Laundering Bill was introduced, which extends reporting requirements to legal professionals. Similar bills failed in each of the two previous sessions of Parliament review.
In 2009, the Bill was ratified and became the Proceeds of Crime and Ant-Money Laundering Act (POCAMLA). The Act is the most comprehensive piece of AML legislation in Kenya. It provides necessary details for reporting requirements, penalties, and money laundering offenses. The Act also established the Financial Reporting Centre (FRC), which is charged with receiving reports of Suspicious Transaction Reports (STRs). Requirements for the tracing, freezing, and seizing of criminal proceeds are also included in the Act.
Kenya has signed and ratified all of the United Nations (UN) Conventions on combating Money Laundering and the Financing of Terrorism. Kenya has also criminalized money laundering under the Narcotics Drugs and Psychotropic Substances (Control) Act No. 4 of 1994.
AML Training in Kenya
The POCAMLA requires Kenyan financial institutions to create and implement training programs to combat money laundering and terrorist financing activities in the country.
The Economy of Kenya
Kenya is considered the hub for trade and finance in East Africa; however, it has suffered from corruption and reliance upon several primary goods whose prices have remained low.
A severe drought from 1999 to 2000 threatened Kenya’s economy, causing water and energy rationing and reducing agricultural output. As a result, the country’s GDP experienced a downturn and the International Monetary Fund (IMF) stepped in to help provide loans during the drought. However, when the Kenyan government failed to institute several anticorruption measures, the IMF stopped lending to Kenya.
In 2006, the World Bank and the IMF delayed loans pending action by the Kenyan government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption.
Banking in Kenya
The Central Bank of Kenya was established in 1966 through an Act of Parliament, the Central Bank of Kenya Act of 1966.
The Bank aims to achieve monetary and financial stability throughout Kenya. Among its many duties, the Bank is responsible for formulating and implementing a stable monetary policy, fostering the success of a market-based financial system, maintaining the foreign exchange reserves, and issuing currency notes and coins.
The currency of Kenya is the Kenyan Shilling (KES) which is divided into units of 100 cents. Coins are issued in denominations of 5, 10, 50 cents and 1 and 5 shillings. Banknotes are available in denominations of 5, 10, 20, 50, 100, 200, 500 and 1,000 shillings.
Other Key Statistics of Kenya
Time Zone: EAT (UTC+3).
Location: Eastern Africa, bordering the Indian Ocean, between Somalia and Tanzania.
Population: 45,010,056 (July 2008 est.).
Languages Spoken: English and Swahili.