Tough times for betting firms, NGOs as MPs okay laundering law

A House team has cleared the way for a proposed law which seeks to empower the state to monitor financial dealings by NGOs, jewellery merchants, landlords and other big-money businesses.

The Justice and Legal Affairs Committee has approved the Anti-Money Laundering and Countering Terrorism Financing Laws (Amendment) Bill, 2025.

Financial dealings by betting firms, retirement benefit schemes, Saccos and sacco owners, accountants, estate agents and certified public secretaries are also targeted.

“The bill is necessary to ensure compliance with global standards of anti-money laundering and combating terrorism financing,” the Tharaka MP Gitonga Murugara-led committee said.

The National Assembly panel said the proposed amendments are in line with the existing anti-money laundering law.

“The committee recommends that the House approve the bill with amendments as proposed (by the committee),” the report before the National Assembly plenary reads.

President William Ruto’s administration sponsored the law in efforts to step up the war against money laundering.

The committee has approved the bid to arm the Public Benefits Regulatory Authority to monitor and report NGO finances to the government.

The regulator would be clothed with powers to “safeguard civil society groups from the risk of money laundering and terrorism financing.”

Persons engaged in the production of precious minerals, buying or brokering of the same, manufacturing of jewellery and retail selling of precious stones would be monitored too.

In its considerations, JLAC has further empowered the director of mines to draw up rules to further regulate the sector.

MPs, however, rejected efforts by the Law Society of Kenya for further changes to other laws relating to money laundering.

“The proposals could be introduced as substantive amendments in the future,” the committee recommended.

For NGOs, the regulator would oversee and monitor organisations that are at risk of terrorism financing.

The aim of the proposed changes is to intervene in Kenya’s greylisting by the Financial Action Task Force (FATF) on February 24, 2023.

The move followed concerns that the efforts to combat money laundering were wanting.

Failure to address the issues could make a country blacklisted, resulting in severe consequences to the economy.

For miners, the director of mines is set to vet proposed mineral rights holders and mineral dealers of a reporting institution.

Sacco investors would also be vetted, with members, directors, officers, employers and agents required to comply with the anti-money laundering laws.

Accountants' body ICPAK would also regulate, supervise and enforce compliance among persons and entities it supervises.

The institute would vet proposed members of a reporting institution and compel accountants to produce documents on demand.

The rules would also apply to estate agents, certified public secretaries, with hefty fines of not less than Sh5 million applicable.

If approved in plenary, those who fail to report transactions to the Financial Reporting Centre would be liable for a jail term of seven years or a fine of not more than Sh10 million, or both.

Organisations in breach of the anti-money laundering law would also be fined Sh20 million for such violations.

The bill has empowered the Financial Reporting Centre, supervisory bodies and self-regulating bodies to supervise and enforce measures to combat the financing of terrorism.

The centre is further being empowered to prevent funds or other assets from being made available directly or indirectly to agencies involved in money laundering.

In the proposed dispensation, the BCLB would vet proposed significant shareholders of betting firms, proposed beneficial owners, proposed directors and senior employees.

The board would also be required to conduct onsite inspections, offsite surveillance and undertake consolidated supervision of the firms under its purview.

The Retirement Benefits Authority is also being mandated to vet pension schemes and those investing in the retirement schemes.

The rules are being tightened to ensure that no member, manager, custodian, administrator or any other person in a scheme or scheme fund shall violate or fail to comply with anti-money laundering laws.