Kenya will monitor judges’ and ministers’ bank accounts as part of an IMF agreement

In new promises to the International Monetary Fund (IMF), Kenya intends to watch the financial activities of senior officials, including the President, and their allies beginning next year in an effort to avoid being barred from the global financial system for money laundering.

The Treasury has informed the IMF that the State will monitor the movement of money for people who are politically exposed, including their bank accounts, to match their known income and financial transactions.

The Proceeds of Crime and Anti-Money Laundering Act and Regulations are being modified in an effort to stop the laundering of illegally obtained proceeds from corruption.

The proposed amendments come in response to a devastating analysis by a global anti-money laundering team that highlighted flaws in Kenya’s anti-money laundering law’s reporting requirements for financial transactions involving politically exposed persons (PEPs), their family, and associates.

PEPs include the president, ministers, MPs, CEOs of parastatals, senior judges, senior military personnel, and members of the boards of prestigious companies.

The authorities intend to present draft amendments to the Proceeds of Crime and Anti-Money Laundering Act and Regulations to the National Assembly by the end of June 2023 to help prevent the laundering of illicit proceeds from corruption. These amendments will address gaps in the AML/CFT legal framework and include requirements on politically exposed persons (PEPs), in accordance with FATF standards.

“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.”

PEPs are generally persons entrusted with prominent public functions and are susceptible to being involved in corruption because of their position of influence.

Kenya has a history of multi-billion shilling scandals that have failed to result in high-profile convictions.

This has angered the public, who accused top officials of acting with impunity and encouraging graft among those in lower posts.

The State scandals often involve bogus tenders and suppliers that allegedly result in the theft of hundreds of millions of shillings, turning public servants on low pay into overnight multi-millionaires.

Public servants are required by law to reveal their incomes, bank deposits and assets such as land, buildings and vehicles once every two years.

Leading government officials are battling asset freezes and seizures after investigations turned up hidden bank accounts, vehicles, and homes that didn’t match their salaries.

This shows that some government employees do not completely disclose their assets on the wealth declaration forms.

Financial institutions are required to conduct “increased ongoing surveillance” of business relationships involving PEPs by the Financial Action Task Force (FATF), the international agency that monitors money laundering and terrorism funding.

Kenya’s money laundering laws will be modified in accordance with FATF guidelines that are accepted worldwide.