In Summary
  • The move is intended to enable banks effectively identify, “assess, monitor, manage and mitigate” the risks associated with the vices.
  • Banks’ top management and their board will be required to understand the nature of money laundering threats and vulnerabilities an institution faces.
  • Financial institutions will be required to appoint a money laundering reporting officer.

Banks will be required to file with the Central Bank of Kenya (CBK) detailed annual reports of risks associated with money laundering and terrorism financing and mitigation measures.

The financial services sector regulator says in an industry guidance note that this is intended to enable banks effectively identify, “assess, monitor, manage and mitigate” the risks associated with the vices.

“On an annual basis, institutions shall provide Central Bank of Kenya (CBK) with a report on the results of its money laundering and terrorism financing risk assessment. The report should be submitted by December 31 of the year,” says CBK.

Banks’ top management and their board will be required to understand the nature of money laundering threats and vulnerabilities an institution faces and ensure that the bank adopts a risk-based approach.

Financial institutions will be required to appoint a money laundering reporting officer. The officer will be the central point of contact with the CBK for anti-money laundering and combating the financing of terrorism.

CBK says banks will be required to identify and assess the money laundering and terrorism risks that may be associated with the institution’s unique combination of customers, products and services, geographic locations, delivery channels and other qualitative factors.

“Attempts to launder money, finance terrorism, or conduct other illegal activities through a bank can emanate from many different sources.

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