Bank customers will no longer have to disclose source of Sh. 2.1 million (USD15,000) when doing transactions. This is if a new regulation proposal by the Cabinet is approved by parliament.
The new regulation was proposed during the cabinet meeting that was held on Tuesday and chaired by President William Ruto.
In the meeting, the cabinet approved the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill 2023.
This bill, if passed by parliament, will increase the cash-reporting threshold by 50 per cent from the current $10,000 (Sh. 1.42 million).
“Besides raising the cash reporting threshold from $10,000 to $15,000, the Bill provides for the requirement for companies to keep a register of beneficial owners,” a statement by the Presidential Communication Service (PCS) said.
The proposed $15,000 or Sh. 2.1 millio threshold is the maximum limit recommended by the Financial Action Task Force (FATF).
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The FATF is the global money laundering and terrorist financing watchdog for which Kenya aligns through the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG)— an associate member of FATF.
Businesses and individuals transacting more than Sh. 1.42 million are required to declare to their bankers why the money cannot be deposited or withdrawn through electronic means — Kenya Electronic Payments and Settlement System and Real Time Gross Payment System.
The disclosures are part of global practice aimed at ridding financial systems of dirty cash.
Kenya passed anti-money laundering legislation in 2009 and enacted several regulations in the following years, including the one that requires commercial banks to report all suspicious cash transactions.
Commercial banks started following the rules aggressively in recent years after at least five of them were hit with heavy fines by regulators for being used to transact proceeds of crime in government-related procurement deals.
Other institutions, or their staff, have also been investigated on suspicions of being used to funnel cash used by Somalia-based militants, to carry out attacks against civilians in Kenya.