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Saccos and accountants body roped into dirty cash watchlist
Majority Leader and Kikuyu MP Kimani Ichungwâ makes his address during the three-day mid-term retreat for Members of the National Assembly at Lake Naivasha Resort in Nakuru County on January 28, 2025.
Kenyans making deposits to savings and credit cooperative societies (Saccos) are likely to come under scrutiny over their source of funds, if a proposed law that seeks to tighten the country’s leash on dirty money in the economy and strengthen its chances of getting off the grey list is passed.
The Anti-Money Laundering and Combating Terrorism Financing Laws (Amendment) Bill, 2025 proposes to, among other things, increase the number of institutions charged with the regulation and supervision of anti-money laundering.
Among the bodies that will now be charged with this responsibility are the Betting Control and Licensing Board, the Sacco Societies Regulatory Authority (Sasra), the Estate Agents Registration Board, the Directorate of Mining, the Institute of Certified Public Accountants (ICPAK) and the Institute of Certified Public Secretaries.
If the Bill is adopted as presently structured, it could mean that Kenyans making deposits to their saccos, for example, will likely face interrogation over their source of funds above a given threshold prescribed by Sasra.
“This Bill seeks to amend various Acts of parliament relating to anti-money laundering, countering the financing of terrorism and countering the financing of proliferation of weapons of mass destruction in addressing the technical compliance deficiencies identified arising from the Eastern and Southern Africa Anti-Money Laundering Group and review by Financial Action Taskforce,” states the Bill tabled by National Assembly Majority Leader Kimani Ichung’wa on March 4, 2025.
The global anti-money laundering watchdog, Financial Action Task Force (FATF), grey-listed Kenya on February 23, 2024, amid concern about loopholes and low commitment to fighting money laundering, terrorist financing, and proliferation financing.
FATF is an inter-governmental organisation set up to combat money laundering and terrorism financing by setting global standards and checking if countries respect them.
With regard to the Directorate of Mining, the Bill proposes to have persons who engage in cash transactions on precious metals and precious stones of any value above $15,000 (Sh1.9 million) placed under intense scrutiny for money laundering.
The designation of regulatory bodies as institutions charged with regulation and supervision of anti-money laundering and terrorism financing in the country is in line with Kenya’s commitment to shift to a risk-based approach in its fight against dirty money in the economy.
A risk-based approach, as opposed to a prescriptive approach which is currently in use, is anchored on continuous monitoring and evaluation of an evolving risk profile hence the need to onboard regulatory bodies that are in periodic contact with the institutions under their jurisdiction.
“Kenya will work to improve risk-based anti-money laundering and counter-terrorism finance supervision of financial institutions and designated non-financial businesses and professions and adopt a legal framework for the licensing and supervision of virtual assets service providers,” the Financial Action Task Force stated in its report following the greylisting of Kenya in February 2024.
Another measure that has in the recent past been put in place by the government in an effort to combat money laundering is the Income Tax (Charitable Organisations and Donations Exemption) Rules of 2024.
The regulations, which take effect on June 18, 2025, seek to streamline tax exemption for organisations that raise cash for undertaking charity and making donations in the country.
Importantly, Regulation 16 of the Income Tax (Charitable Organisations and Donations Exemption) Rules of 2024 bars charitable organisations from holding any surplus cash over 15 percent of their funds accumulated for three successive years without applying the surplus to charitable purposes.
The government has been expanding the list of entities involved in the fight against money laundering. For example, the Financial Reporting Centre (FRC) and the Law Society of Kenya (LSK) reached an agreement in 2024 that would see the latter become a self-regulatory organ and which would see lawyers report on proceeds of crime and anti-money laundering.
Commercial banks and officials now face steep fines for abetting terrorism financing even as Kenya fights to lift itself from a global ‘grey list’ for not having strong safeguards against the flow of dirty cash.
Regulations published by the Interior and Administration of National Government ministry in March 2024 said any person found guilty of unauthorised release of frozen funds or assets linked to terror suspects flagged by the United Nations would be jailed for up to 20 years in jail.
Legal entities—either reporting institutions such as banks or law enforcement agencies—that will release such frozen assets without authorisation would be slapped with a fine of Sh20 million in far-reaching regulations against terrorism financing.
“No person within Kenya shall make available any funds or other assets to or for the benefit of designated persons or entities unless licensed, authorised or otherwise notified in accordance with the relevant United Nations Security Council Resolutions,” states sub-regulation (1) of Prevention of Terrorism (Implementation of The United Nations Security Council Resolutions on Prevention, Suppression, and Disruption of Proliferation Financing) Regulations, 2023.
