CBK tightens the noose on money launderers
What you need to know:
- Banks told to raise compliance efforts under fresh guidelines
- CBK orders financial institutions to implement its recently outlined policy measures against money laundering and terrorist financing.
- New CBK guidelines require banks to tighten the scrutiny on politicians, foreign entities and personalities, supermarket owners, car dealers among others
The Central Bank of Kenya (CBK) is piling pressure and personal liability against bankers who breach anti-money laundering laws, raising the spectre of bankers going to jail.
Financial institutions have been reminded to raise compliance efforts under tough new money laundering guidelines.
In a circular to chief executive officers of commercial banks and mortgage financiers on March 23, 2018, CBK director in charge of Bank Supervision Gerald Nyaoma orders financial institutions to implement its recently outlined policy measures against money laundering and terrorist financing.
My Nyaoma warns that the vices pose “a major threat to the integrity of the financial sector particularly the banking sector.”
“In this regard the CBK has put in place the necessary regulatory framework on money laundering countering the financing of terrorism,” says Mr Nyaoma.
Large transactions
The Central Bank in 2016 had written to lenders instructing them to have customers complete forms explaining the nature of any large cash transactions amounting to Sh1 million and above.
The noose began tightening on rogue financial institutions in 2015 after President Uhuru Kenyatta called for tough penalties against individuals and institutions who flout anti-money laundering laws.
The measures include loss of licence for banks found culpable.
The new CBK guidelines will require banks to tighten the scrutiny on politicians, foreign entities and personalities, supermarket owners, car dealers among others whose operations include handling large amounts of cash.
“An institution shall determine, based on its own criteria, what risks a particular customer poses,” say the guidelines.
Non-bank financial institutions such as money services businesses, casinos and brokers/dealers in securities, and dealers in precious metals, stones, real estate dealers will be on the spot.
Cash-intensive businesses
Cash-intensive businesses, including, supermarkets, convenience stores, restaurants, retail stores, liquor stores, wholesale distributors, car dealers among others as well as foreign and domestic non-governmental organisations and charities will be in the spotlight.
CBK is zeroing in on politically exposed persons (PEPs)—or individuals who are or have been entrusted with prominent public functions (both foreign and local.
