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CBK Issues New Checks to Curb Money Laundering

The Central Bank of Kenya (CBK) recently released Circular No. 2 of 2019 relating to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
The circular details a requirement by the CBK that all commercial banks, microfinance banks and mortgage finance companies provide comprehensive evidence of their compliance with regulations relating to AML/CFT. As part of demonstrating compliance, the financial organisations are required to nominate an independent external third party to review their AML/CFT compliance programmes by 31 May 2019.

The independent reviewer will inspect the banks’ due diligence measures, AML/CFT risks, related internal controls and monitoring/reporting systems among others and ultimately deliver detailed findings in a report to the CBK. The aim of this and other recent CBK instructions is to strengthen the integrity of our country’s financial systems.

Financial institutions are expected to submit profiles of their independent nominees to CBK for approval. The appointed third parties will evaluate the institution’s customer due diligence measures, its risk assessment for cases of money-laundering and terrorism financing, check the firm’s internal controls against such financial crimes, and their monitoring process. Subsequently, the nominated entities are expected to present their independent findings to the Central Bank by 31st May 2019.