Kenya Gov’t to Spy on Bank Accounts of Politically Exposed Persons in IMF Deal
The Kenyan government has committed to monitoring the financial activities of high-ranking politicians and government officials, among them President Ruto, as part of a deal with the International Monetary Fund (IMF).
Business Daily reports that the Treasury assured IMF that from next year, the government will track the flow of cash of politically exposed persons(PEPs), including their bank accounts, to ascertain their known sources of income.
The move is aimed at preventing the country from being locked out of the global financial system for money laundering.
Consequently, the Financial Reporting Centre (FRC), Kenya’s anti-money laundering watchdog, is preparing amendments to the Proceeds of Crime and Anti-Money Laundering Act and Regulations.
The amended regulations will compel financial institutions to reveal sources of cash for top politicians, families and business associates.
The changes in the regulations follow a report by an international anti-money laundering team that revealed deficiencies in Kenya’s anti-money laundering law on reporting financial transactions done by politically exposed persons (PEPs) who include the president, ministers, MPs, parastatal CEOs, high-ranking judges, high-ranking military officers, and board members of top firms.
“To help prevent the laundering of illicit proceeds from corruption, the authorities plan by end-June 2023 to submit to the National Assembly, draft amendments to the Proceeds of Crime and Anti-Money Laundering Act and Regulations to address gaps in the AML/CFT legal framework, including requirements on politically exposed persons [PEPs], in line with FATF standards,” the IMF said in a report after approving a $447.39 million disbursement to Kenya on Monday.
“To this end, the authorities aim to prioritize ensuring compliance by banks with enhanced due diligence measures for higher risk customers, including PEPs, through AML/CFT risk-based supervision.”
The amendments to Kenya’s money laundering law will also require financial institutions to conduct enhanced scrutiny of their entire business relationship with a PEP and make a suspicious transaction report to the FRC if higher risks are identified.