HIGHLIGHTS ANTI-MONEY LAUNDERING AND COMBATING OF TERRORISM FINANCING LAWS ACT, 2023

 

	ANTI-MONEY LAUNDERING AND COMBATING OF TERRORISIM FINANCING LAWS ACT, 2023
Preamble	ACT of Parliament to amend the laws relating to anti-money laundering and combating of terrorism and proliferation financing; and for connected purposes.
Anti-Money Laundering and Combating of Terrorism Financing Laws Act, 2023 S.2	Amendments of existing laws  The Law has amended some of the existing clauses under which a number of legal entities in Kenya are established and/or regulated, i.e State Corporations Act (Cap. 446) Capital Markets Act (Cap. 485A), Insurance Act (Cap. 487) Banking Act (Cap. 488) Central Bank of Kenya Act (Cap. 491) Microfinance Act (No. 19 of 2006),  Limited Liability Partnership Act, 2011 (No. 42 of 2011),  Companies Act, 2015 (No. 17 of 2015).
Banking Act S.2   Central Bank Act S.2 Microfinance Act (No. 19) S.2 National Payment System Act S.2	The section regarding "significant shareholder" has been removed/altered and substituted with the following: The term "beneficial owner" now holds the meaning ascribed to it in the Companies Act, 2015.
Banking Act (Cap. 488) S. 33 D Central Bank of Kenya Act (Cap. 491) S. 51 A. Microfinance Act (No. 19) S.36B  Banking Act (Cap. 488) S.33 (E) Central Bank of Kenya Act (Cap. 491) S. 51 B.	The Central Bank of Kenya has been tasked with the responsibility to regulate and combat anti-money laundering. The Central Bank shall regulate, supervise, and enforce compliance for anti-money laundering, combating the financing of terrorism, and countering proliferation financing purposes by all reporting institutions regulated and supervised by the Central Bank and to whom the provisions of the Proceeds of Crime and Anti-Money Laundering Act, 2009 apply. (2) The Central Bank may— Vet proposed significant shareholders, proposed beneficial owners, proposed directors and senior officers of a reporting institution(s) Conduct onsite inspection Conduct off-site surveillance Undertake consolidated supervision of an institution and its group; Compel the production of any document or information  Impose monetary, civil or administrative sanctions for violations related to anti-money Issue regulations, guidelines, directions, rules or instructions for anti-money laundering, combating the financing of laundering, financing countering financing purposes, terrorism proliferation purposes; Corporate information and countering financing and share for anti-money combating the terrorism or proliferation laundering, financing of terrorism, and countering proliferation financing purposes. New penalties for violations relating to money laundering and terrorism financing have been imposed for non-compliant legal persons/entities. (2) A person who violates or fails to comply with the provisions of subsection shall be liable— (a) in case of a legal person, to a penalty not exceeding twenty million shillings; (b) in the case of a natural person, to a penalty not exceeding one million shillings; and (c) to additional penalties not exceeding one hundred thousand shillings in each case for each day or part thereof during which such violation or non-compliance continues.
Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) 13(4) (c)	Companies are required to comply with disclosure of company beneficiaries Under the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) No. 10, company secretary” has the meaning assigned to it of any under the Certified Public Secretaries of Kenya Act, 1988; Companies will be required to enter a statement of the particulars in respect of each beneficial owner(s) of the proposed company in accordance with Section 16A of this Act. 16A. (1) The applicant for registration shall ensure that the requisite statement of particulars of the company's beneficial owners complies with beneficial owners shall contain— (a) the required particulars of anyone who is a beneficial owner; and (b) any other matters that, on incorporation, shall be required to be entered in the company's register of beneficial owners under this Act. (d) in the case of a nominee director, the fact that they are nominees and the particulars of their nominator. (e) contains information as to whether any shareholder is a nominee and the particulars of their nominator.
Companies Act,2015  S.93 A (1-12) S.95 S.138 A S.904	Compliance measures This section (93A) outlines the requirements for companies to maintain a register of their beneficial owners. It specifies the information to be included, the timeframe for submitting the register to the registrar, and potential penalties for non-compliance. Beneficial owners—Companies must submit the register within specified periods as outlined in (S.95) of  and as follows: (a) in the case of a proposed company, when submitting documents as provided for under section 13 of this Act; and (b) in the case of existing companies, within sixty days of coming into force of this section. The registrar has the discretion to extend these periods. Amendments to the register must also be promptly lodged. Failure to comply may result in administrative penalties, and persistent non-compliance can lead to further penalties or fines upon conviction.  Additionally, companies are obligated to retain records of beneficial owner information for at least ten years (S. S.904 A) This section imposes penalties for non-compliance by a company and its officers. Failure to meet the requirements of subsections 5 or 6 results in an initial administrative penalty of two thousand shillings. If non-compliance persists, the company and its officers face additional daily penalties of one hundred shillings.  Furthermore, failure to comply with subsection (3)(b) is considered an offence, leading to fines upon conviction for both the company and the defaulting officers.