Kenya: Commercial banks now subject to new money laundering laws

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Kenya’s commercial banks will from next month have to report any suspicious transactions by their customers directly to Financial Reporting Center (FRC) as the money laundering law finally takes effect. The Proceeds from Crime and Anti-Money Laundering Act (2009) gazetted on June 28 2010 also requires banks to keep a database of their customers’ personal details for seven years after a transaction is made.

FRC Interim Director Jackson Kitili said banks will get circulars to this effect by end month. This means bank customers may also have to give more personal information to banks as FRC, inaugurated last June, moves to track down those who “clean” their ill-gotten money through the banking system before investing it elsewhere. The law targets all institutions dealing in monetary transactions, but FRC is targeting banks first because they have the “highest risk.”

Failure to report such crimes will result in a fine of 5 million shillings for corporate entities and 2 million shillings or a three-year jail term for individuals.

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