KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Sara Ndei, Cliffe Dekker Hofmeyr incorporating Kieti Law LLP
2.15 Financial Action Task Force Standards
• underwriting and placement of life insurance and other investment-related insurance; and • money and currency changing. Any fintech that engages in these activities would fall within the definition of “reporting institution” and would be subject to POCAMLA. The activities with such fintechs would have to comply include: • monitoring all complex, unusual, suspicious, large or such other transactions, on an ongo - ing basis; and • reporting suspicious or unusual transactions or activity to the Financial Reporting Centre upon suspecting that they could constitute or be related to money laundering or the pro - ceeds of crime. In addition, under the DCP Regulations, NDCPs are required to provide evidence to the CBK of the sources of funds invested or to be invested in their business. This ensures that these funds are not the proceeds of criminal activity. Furthermore, market intermediaries are required to obtain the following information from their cli - ents, prior to making any investment order on their client’s behalf: • details regarding the origin of funds used or to be used for the investment, including confirmation from the remitting entity (if funds originate outside Kenya) regarding the client’s business and funds origin; and • a written statement from the client verifying the accuracy of the provided information and confirming that the funds are not the pro - ceeds of money laundering or other illegal activities.
Anti-money laundering (AML) and sanctions rules in Kenya generally follow the standards set by the Financial Action Task Force (FATF). Key Kenyan AML legislation, such as POCAMLA and the Prevention of Terrorism Act, CAP 59B, align closely with FATF Recommendations. In addition, various financial sector laws have been amended to explicitly assign regulatory authorities – including the CBK, CMA, and IRA – with responsibility for regulating, supervising, and ensuring compliance with anti-money laun - dering, combating the financing of terrorism, and countering proliferation financing measures for all reporting institutions under their respective jurisdictions. 2.16 Reverse Solicitation In Kenya, there is no uniform approach regard - ing reverse solicitation, and the position varies by sector. For instance, in the capital markets sector, any securities issued outside Kenya can - not be offered to Kenyan citizens within Kenya – even under reverse solicitation scenarios – without prior approval from the CMA. A similar position is applicable within the insurance sec - tor, where offshore insurance providers must obtain authorisation to offer their products or services locally. In the banking sector, historically, there have generally been no explicit restrictions on reverse solicitation. However, recent amendments to the Central Bank Act have introduced circumstanc - es under which an offshore provider of banking products or services might now require regula - tory approval from the CBK to offer such prod - ucts or services in Kenya.
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