Agency seeks Kenya removal from global terrorism watchlist

Money Markets

Kenya has been taking several steps to counter money laundering and financing of terrorism in its financial services sector. Photo/FILE 

By GEOFFREY IRUNGU, girungu@ke.nationmedia.com

In Summary

• Kenya’s financial sector status on the watchlist is being reviewed by the Financial Action Task Force (FATF) — an international standards body on AML/CFT — which visited Kenya earlier this month.
• The standard’s body has maintained Kenya on the “watchlist” for years on the basis that it does not have sufficient anti-terror and anti-money laundering controls.

A State financial markets monitor is investigating 148 cases of suspicious transactions as it seeks the removal of Kenya from a list of countries without enough anti-money laundering (AML) and criminalising financing terrorism (CFT) safeguards.

Kenya’s Financial Reporting Centre (FRC) said another 53 cases that have been investigated have been forwarded to law enforcement agencies, including the Criminal Investigations Department (CID) and the Ethics and Anti-Corruption Commission (EACC), for possible prosecution.

Kenya’s financial sector status on the watchlist is being reviewed by the Financial Action Task Force (FATF) — an international standards body on AML/CFT — which visited Kenya earlier this month.

The standard’s body has maintained Kenya on the “watchlist” for years on the basis that it does not have sufficient anti-terror and anti-money laundering controls, and is therefore exposed to financial crimes.

“We have been investigating many cases since FRC came into operation and we have had 207 suspicious transactions. Of these, 59 are fully analysed and 53 have been forwarded to law enforcement agencies.

“Six cases have been closed because they required no further action,” said James Manyonge, company secretary and head of legal and policy at FRC. But Mr Manyonge did not reveal the amounts involved in the suspicious transactions.

Asked about the slow pace at which the investigations had progressed, Mr Manyonge said the FRC was still at a growth stage and had only 17 employees.

“I wouldn’t say that we have been slow. The numbers have been growing and this is still a new organisation,” said Mr Manyonge.

Among the factors identified as contributing to Kenya’s “watchlist” status was the fact that it had not implemented the AML/CFT regulations, which were supposed to accompany the anti-money laundering Act.

The regulations were put into operation last year. Kenya’s weak position in meeting clean money standards first came to the limelight in June 2012 during a FATF meeting.

READ: US banks reject Kenya cheques over terror rules

In the same year in October, Kenya sent a delegation comprising officials from the Central Bank of Kenya, the Treasury, the FRC and the National Intelligence Services to Paris where it made a presentation to FATF officials showing the laws that the country had enacted.

“Most of the transactions were conducted in cash, with 90 per cent of the cases being from commercial banks. The rest of the cases were from telecom and other companies,” said Mr Manyonge.

In February this year, FATF said it was monitoring countries that had committed to meeting the international standards, including Kenya, Tanzania, Uganda, Sudan, Zimbabwe, Kuwait, Cuba and oil-rich Angola.

FATF noted that Kenya had made significant steps to address the problems in its financial system, but it would review the situation on the ground to confirm that progress had indeed taken place.