The constant fight to deter financial crimes by government institutions such as the Central Bank of Kenya (CBK) and Financial Reporting Centre (FRC) as well as international agencies has been a frustrating one as financial criminals adopt new technologies and modern tactics to commit unlawful acts. Financial crimes such as fraud, corruption, money laundering, drug trafficking and identity theft have become prevalent over the recent years leaving businesses with no option but to comply with various laws and regulations to safeguard their entities.

In Kenya, financial institutions are required to comply with various Acts and regulations by the CBK in a bid to strengthen their AML/CFT programs. These laws include the Proceeds of Crime and Anti Money Laundering Act (POCAMLA), Proceeds of Crime and Anti Money Laundering Regulations 2013 and the Prevention of Terrorism Act 2012. Organizations without the right policies, processes and systems become easy targets of financial criminals. Adequate customer due diligence and KYC procedures as well as proper customer risk assessments and risk categorizations cannot be overlooked. Identity of company’s beneficial owners is paramount as these have the ultimate controlling stake of the legal entities.

In July 2019, the Kenya’s Statute Law (Miscellaneous Amendments) Act, 2019, made amendments to the Companies Act, 2015, by introducing Section 93 A, which requires every company registered in Kenya to prepare and keep a register of its beneficial owners. The register unveils the beneficial owners’ personal information, the control nature or ownership they have in the company and the date they became beneficial owners. The aim is to promote transparency in the company’s ownership structure.

Shell banks have been on the rise as launderers seek tactical ways to conceal their acts. Shell banks have no physical presence in the country of incorporation or licensing. They are not affiliated to any known financial group. Most financial institutions prohibit transacting with such entities, and form part of their sanctions list. There are various sanction issuing competent authorities that financial entities can leverage on in strengthening their financial sanction regime and customer screening mechanisms. The United Nations Security Council (“UNSC”); the United States Office of Foreign Assets Control (“OFAC”); the Her Majesty’s Treasury, United Kingdom (“HMT”); the European Union (“EU”) and World Compliance Check are among well-known sanction issuing authorities.

At Riskhouse International we examine the effectiveness of your Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) programs by offering; AML/CFT Health Check & Independent Assessments; KYC Diligence, Screening & Remediation; AML/CFT Analytics, Monitoring & Investigations; and AML/CFT Training & Awareness.