Parliament has proposed a raft of amendments to the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) in a bid to strengthen the power of the institutions charged with the responsibility of fighting graft and economic crimes in the country.
In the proposed amendements currently before Parliament, the State will have powers to seize property and freeze transactions deemed suspicious in suspect money laundering cases.
In the proposed amendments to the POCAMLA, is a proposed five-days freeze on suspicious bank transaction, which will give investigative agencies time to move in and stop the nab the culprits. The new law will give the Financial Reporting Centre (FRC) powers to stop the transactions for not more than five working days without going to court, allowing other State agencies to investigate and stop the criminal activities before they occur.
Suspects have been using the slow processes to move funds for laundering purposes and to fund terrorist activities.
Currently, transactions involving suspect money laundering require banks to keep records, a gap that criminals which has been utilized by criminals to circulate dirty cash and fund activities linked to terrorism.
“The Centre [FRC] may, for purposes of achieving the objectives of the Act, direct the reporting institution or person, in writing not to proceed with the transaction or proposed transaction or any other transaction in respect of the funds or property affected by that transaction or proposed transaction,” says the Bill.
The five-day freeze order will allow the FRC to share information with other anti graft Multi Agencies Team (MAT) institutions such as the Kenya Revenue Authority (KRA), the Ethics and Anti-Corruption Commission (EACC), and the Assets Recovery Agency (ARA) for appropriate action.
Transactions targeted include those relating to terrorism financing, buying and selling of property, creation, operation, and management of companies as well as management of bank savings and shares accounts on behalf of clients.
“The Bill seeks to introduce a new section 44A requiring the Financial Reporting Centre to intervene where the Centre has reasonable grounds to suspect that a transaction may be suspicious. This will ensure timely access to information on assets held by criminals as preventive and repressive measure and, ultimately disrupting criminal networks and unlawful activities.”
The anti-graft agencies EACC and the ARA are currently required to get court orders for seizure and forfeiture of the assets suspected of involvement in money laundering.
The requirement to get court orders has seen investigative agencies lag as suspects complete transactions and enjoy proceeds of dirty cash. Lawmakers will debate the Bill when they return from their month-long recess next week.
Financial institutions have been sanctioned for being culpable in suspicious financial transactions, and in 2018, the regulator fined five local banks a massive Kshs392.5 million for facilitating the National Youth Service corruption scandal.