The Kenya Bankers Association (KBA) has expressed concerns regarding Kenya’s proposal to raise the reporting threshold for large transactions from $10,000 [Ksh1.4 million] to $15,000 [Ksh2.1 million]. The KBA argues that this change could increase the risk of money laundering due to the country’s strategic regional location.
Recently, the Cabinet approved amendments to anti-money laundering laws, increasing the reporting limit to $15,000. Banks have pointed out that this change may lead to a higher likelihood of illicit funds entering the country.
Under the current law, banks must inquire about the sources of funds for transactions exceeding $10,000 and report any suspicious cash movements to the Financial Reporting Centre (FRC).
David Nyamato, the Chair of KBA, urged the National Assembly Finance and National Planning Committee to maintain the reporting limit at $10,000 instead of raising it to $15,000 or its equivalent in other currencies.
The Finance and National Planning Committee is conducting public hearings on the proposed bill, which includes various changes to anti-money laundering laws.
Kenya has faced scrutiny for substantial transactions with unknown sources, some of which are suspected to involve fraud. The KBA highlights that Kenya’s regional significance makes it susceptible to attracting illicit funds and supporting illegal activities, including terrorism.
Nyamato emphasized that Kenya’s role as the largest economy in the region and its status as a transit hub in Eastern Africa pose substantial risks related to illicit commerce.
Given its proximity to unstable countries like Somalia and South Sudan, Kenya has been implicated in cases where its financial infrastructure has been used to transfer money.
On July 18th, the Cabinet approved a plan to raise the cash transfer reporting limit to Ksh2 million, as outlined in the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill.
The Bill is currently under review in Parliament, where it will be debated and subject to public participation.
