logo

Task Force on the National Risk Assessment (NRA) on Money Laundering and Terrorism Financing

Kenya is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) which is, in turn, an Associate Member of the global Financial Action Task Force (FATF). The mandate of the FATF is to set standards and to promote the effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system (the FATF Recommendations). Member countries of FATF are required to implement extensive measures in order to avert and diminish these threats.

In line with the FATF Recommendations, Kenya’s Cabinet Secretary for the National Treasury and Planning (the Cabinet Secretary) on 22nd March 2019 declared the appointment of the Taskforce on the National Risk Assessment on Money Laundering and Terrorism Financing (the Task Force) by way of Gazette Notice No. 2577 of 2019.

The Task Force is comprised of officials from the following organizations: the National Treasury and Planning – Chairperson, Financial Reporting Centre (FRC) – (Co-ordinator), Central Bank of Kenya (CBK), Anti-Narcotics Unit (ANU), Anti-Terrorism Police Unit (ATPU), Asset Recovery Agency (ARA), Kenya Bankers Association (KBA), Kenya Revenue Authority (KRA), National Police Service (NPS), Office of the Attorney General and Department of Justice (OAG and DOJ), Office of the Director of Public Prosecutions (ODPP), Directorate of Criminal Investigations and the Capital Markets Authority (CMA) amongst other Institutions who have the mandate to recommend an effective policy to combat money laundering and terrorism financing in Kenya. The term of the Task Force shall be one (1) year or for a longer period as may be determined by the Cabinet Secretary.

As part of its mandate, the Taskforce is required to discuss and hold meetings with concerned Ministries, Departments and Agencies (MDAs) and other concerned parties and stakeholders to assess and understand the level and trends on money laundering (ML) and terrorist financing (TF) risk, the concerned parties and stakeholders include: the Architectural Association of Kenya, the Association of Insurance Broker Kenya, Association of Kenya Insurers, Hotels and Restaurants Authority, Kenya Association of Manufacturers, Kenya Association of Stockbrokers and Investment Banks, Institute of Quantity Surveyors, Institute of Certified Public Accountants of Kenya, Institute of Certified Public Secretaries Kenya, the Law Society of Kenya, the office of the Auditor General and the Judiciary of Kenya amongst other stakeholders.

The Task Force’s Duties and Responsibilities

The Task Force’s duties and responsibilities include:

  • undertaking the necessary preparatory work for the national risk assessment (NRA) on money laundering and terrorism financing and to prepare the NRA report;
  • holding discussions with the MDA’s and other concerned parties and stakeholders to identify and assess the level of threat posed and the trends of money laundering and terrorist financing risk in the country;
  • determine the vulnerability of financial institutions and designated non-financial businesses and professions to money laundering and terrorism financing; and
  • make legislative, administrative or any other recommendations to address any gaps in Kenya’s regime and to develop a national strategy on combating money laundering and terrorism financing.

In line with their responsibilities, the Task Force must submit to the Cabinet Secretary:

  • progress reports every three months;
  • Kenya’s draft National Risk Assessment by 31st January 2020;
  • a final report by 28th February 2020; and
  • a national strategy on combating money laundering and terrorism financing by 31st March 2020.

The main aim of the Task Force is to assess and determine the high-risk areas in the financial sector prone to money laundering and terrorism financing and put in place measures to end these activities.

The CBK Governor Dr. Patrick Njoroge earlier this year through “The Integrity of our Financial System: What is at Stake?” press release called for tightening of the implementation of ML and TF laws and regulations in Kenya to safeguard Kenya’s financial system from potential and actual attacks and maintain her position as a core member of the global financial system.  In the coming days, we expect to see increased monitoring and regulation to prevent money laundering and terrorism financing.

If you have any queries regarding the Task Force, money laundering and terrorism financing or the banking and finance practice area generally, please do not hesitate to contact James Wairoto at jwairoto@mwc.legal and Peter Mwaura at pmwaura@mwc.legal. Please note that this e-alert is meant for general information only and should not be relied upon without seeking specific subject matter legal advice.

1 comment on this post

  • Gidraph Good article. A robust legislative infrastructure will be the underlying bedrock towards Kenya having a reliable framework in line with FATF requirements and moreso to appeal the foreign capital players to channel the much needed FDI to the country. Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Legal Fix