In a significant move aimed at strengthening the nation’s stance against money laundering and terrorism financing, President William Ruto of Kenya has signed the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2023 into law. This pivotal legislative development is poised to address longstanding deficiencies in the country’s efforts to combat financial crimes.
Key Highlights of the New Legislation
Extradition of Fugitive Criminals
One of the key provisions of this new law is the provision for the surrendering of fugitive criminals who consent to be extradited to a requesting state. This measure streamlines the process of returning individuals accused of crimes to the jurisdiction seeking their prosecution, bolstering international cooperation in the fight against crime.
Independence for the Financial Reporting Centre
The legislation grants operational independence to the Financial Reporting Centre by excluding it from the definition of a State Corporation. This move aims to enhance the effectiveness and autonomy of the Financial Reporting Centre in its mission to combat money laundering and terrorism financing.
Enhanced Powers for Regulatory Authorities
Under this new legal framework, regulatory bodies, including the Capital Markets Authority and the Insurance Regulatory Authority, are now empowered to enforce compliance with anti-money laundering and terrorism financing laws. This empowerment ensures that financial institutions and other licensees operate in accordance with international standards and best practices.
Alignment with International Standards
The legislation also harmonizes the licensing regime under the Act with the Financial Action Task Force (FATF) Standards. This alignment with global standards ensures that Kenya remains a responsible and compliant member of the international community in its efforts to combat financial crimes.
Central Bank Oversight
The Central Bank of Kenya (CBK) will play a pivotal role in supervising financial institutions and agents of reporting institutions. This oversight function reinforces the integrity and security of the financial sector, safeguarding it from illicit financial activities.
Combating Corruption
In a significant step forward, the Bill includes the laundering of the proceeds of corruption under the definition of “economic crime.” This expansion of the legal framework demonstrates Kenya’s commitment to tackling corruption head-on and recovering ill-gotten gains.
Climate Change Regulation
In addition to the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, President Ruto also assented to the Climate Change (Amendment) Bill (National Assembly Bill No. 42 of 2023). This amendment enhances the nation’s response to climate change by providing for the regulation of carbon markets.
The Climate Change (Amendment) Bill allows for transactions in carbon trading, aimed at reducing greenhouse gas emissions. Importantly, it empowers the Cabinet Secretary to enter into bilateral or multilateral agreements to trade carbon for emission reductions and removals, subject to Cabinet approval.
A Comprehensive Approach
These legislative developments underscore Kenya’s commitment to enhancing its legal and regulatory framework to combat financial crimes, protect its financial sector’s integrity, and address climate change. As the nation continues to strengthen its stance against money laundering, terrorism financing, and environmental challenges, it stands poised to make significant strides in both its economic and environmental endeavors.