State seeks powers to snoop on suspected money launderers

[Courtesy]

People suspected of engaging in financial crime and money laundering will have their communication intercepted and recorded if Parliament approves proposed legal amendments.

The Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2021 proposes suspending the right to privacy under Article 31 of the Constitution for people suspected of violating the law.

“Where a person is suspected or accused of an offence under this Act, the person’s home or property may be searched, possessions seized, information relating to that person’s financial, family or private affairs may be revealed, or the privacy of a person’s communications may be investigated or otherwise interfered with,” states the Bill.

“A limitation of a right under subsection (1) shall apply only for the purpose of the prevention, detection, investigation and prosecution of proceeds of crime, money laundering and financing terrorism.”

The amendments have been proposed by National Assembly Majority Leader Amos Kimunya and seek to give more powers to investigating authorities to take action on individuals suspected of money laundering.

If passed, the new law will establish an oversight board chaired by the Attorney General that will check and advise the Assets Recovery Agency in its functions. Members to the board will include the principal secretary in the ministry of Finance, Director of Public Prosecutions, director general of the National Intelligence Service, and the director of the Directorate of Criminal Investigations.

The law further gives the Financial Reporting Centre powers to stop transactions reported to authorities, including the Competition Authority of Kenya and the Capital Markets Authority if they are suspected to involve laundered money.

“The centre may, for purposes of achieving the objectives of the Act, direct the reporting institution or person, in writing, not to proceed with the transaction or proposed transaction or any other transaction in respect of the funds or property affected by that transaction or proposed transaction for a period not exceeding five working days,” the Bill says.   

The five-day moratorium is expected to allow the Financial Reporting Centre to make the necessary inquiries concerning the transaction and, where appropriate, inform and advise an investigating, regulatory or tax authorities.

If approved, the amendments will be the most significant changes to the Proceeds of Crime and Anti-Money Laundering Act, 2009.

In the current law, accountants have reporting obligations when preparing transactions for their clients that include buying and selling of real estate, and managing of securities and bank savings.

Accountants also have to report to authorities where suspected proceeds of crime and money laundering are used in the creation of new companies or in mergers and acquisitions.