REVIEW OF THE PROCEEDS OF CRIME AND ANTI-MONEY LAUNDERING (AMENDMENT) ACT, 2023

Recently the Law Society of Kenya struck a deal with the State in the fight against money laundering. This is after along stalemate experience between the two over the question of client confidentiality. The Proceeds of Crime and Anti-Money Laundering (Amendment) Act, 2023 now include advocates as reporting persons to report suspicious transactions involving their client’s money which they have reasons to believe emanates from proceed of crime or are intended to finance terrorism activities. The deal will now see the Law Society of Kenya self-regulate its members in an effort to comply with the law as well as keep the confidentiality of their clients.

Below are some of the amendments introduced by the new Act:

The Act has removed the position of a Deputy Director at the Financial Reporting Centre so as to be consistent with the current practice of not providing for positions of Deputy Chief Executives of State Corporations. 

The Act has designated advocates, notaries and other independent legal professionals who are sole practitioners, partners or employees within professional firms as reporting persons for purposes of the Proceeds of Crime and Anti-Money Laundering Act. In this regard the reporting obligation to apply to advocates applies when preparing or carrying out below transactions for their clients:

i. buying and selling of real estate; 

ii. managing of client money, securities or other assets; 

iii. management of bank, savings or securities accounts; 

iv. organization of contributions for the creation, operation or management of companies; 

v. creation, operation or management of buying and selling of business entities. 

The Act also introduces a new section requiring the Financial Reporting Centre to intervene where the Centre has reasonable grounds to suspect that a transaction may be suspicious. This is for purposes of ensuring timely access to information on assets held by criminals as preventive and repressive measure and, ultimately, disrupting criminal networks and unlawful activities. 

The Act further introduce new provisions 130A and 130B limiting the rights to privacy as far as prevention, detection and investigation of money laundering and financing of terrorism is concerned. And 

Lastly the Act amends the First Schedule to the Principal Act to include the Law Society of Kenya and the Sacco Societies Regulatory Authority as supervisory bodies for purposes of the Act.

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