Proceeds Of Crime Anti-Money Laundering Act – Part 2 Money Laundering

Section
1. Short title.
2. Interpretation.
3. Money Laundering.
4. Acquisition, possession or use of proceeds of crime.
5. Failure to report suspicion regarding proceeds of crime.
6. Defence.
7. Financial promotion of an offence.
8. Tipping off.
9. Misrepresentation.
10. Malicious reporting.
11. Failure to comply with the provisions of this Act.
12. Conveyance of monetary instruments to or from Kenya.
13. Misuse of information.
14. Failure to comply with order of court.
15. Hindering a person in performance of functions under this Act.
16. Penalties.
17. Secrecy obligations overridden.
18. Client advocate relationship
19. Immunity where actions are exercised in good faith.
20. Protection of information and informer.

Interpretation
In this Act, unless the context otherwise requires-
“Agency” means the Assets Recovery Agency established under section
“designated non-financial businesses or professions” means- (a) casinos (including internet casinos);
(b) real estate agencies;
(c) dealing in precious metals; (d) dealing in precious stones;
(e) accountants, who are sole practitioners or are partners in their professional firms;
(f) non-governmental organisations;
(g) such other business or profession in which the risk of money laundering exists as the Minister may, on the advice of the Centre, declare;
“Fund” means the Criminal Assets Recovery Fund established under
“person” means any natural or legal person;
“proceeds of crime” means any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed;
“property” means all monetary instruments and all other real or personal property of every description, including things in action or other incorporeal or heritable property, whether situated in Kenya or elsewhere, whether tangible or intangible, and includes an interest in any such property and any such legal documents or instruments evidencing title to or interest in such property;
“realizable property” means- (a) property laundered;

(b) proceeds from or instrumentalities used in, or intended to be used in money laundering or predicate offences;
(c) property that is the proceeds of, or used, or intended or allocated for use in, the financing of any offence; and
(d) property of corresponding value;
“reporting institution” means a financial institution and designated non- financial business and profession;
“tainted property” in relation to an offence means-
(a) any property used in, or in connection with, the commission of the offence;
(b) any proceeds of the offence; or
(c) any property in Kenya which is the proceeds of a foreign offence in respect of which an order may be registered, and when used without reference to a particular offence means tainted property in relation to an arrestable offence.
[Act No. 51 of 2012, s. 2, Act No. 14 of 2015, s. 48.]

PART II – MONEY LAUNDERING AND RELATED OFFENCES

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3. Money laundering
A person who knows or who ought reasonably to have known that property is or forms part of the proceeds of crime and-
(a) enters into any agreement or engages in any arrangement or transaction with anyone in connection with that property, whether that agreement, arrangement or transaction is legally enforceable or not; or
(b) performs any other act in connection with such property, whether it is performed independently or with any other person,
whose effect is to-
(i) conceal or disguise the nature, source, location, disposition or movement of the said property or the ownership thereof or any interest which anyone may have in respect thereof; or
(ii) enable or assist any person who has committed or commits an offence, whether in Kenya or elsewhere to avoid prosecution; or
(iii) remove or diminish any property acquired directly, or indirectly, as a result of the commission of an offence,
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4. Acquisition, possession or use of proceeds of crime
A person who-
(a) acquires; (b) uses; or
(c) has possession of,
property and who, at the time of acquisition, use or possession of such property, knows or ought reasonably to have known that it is or forms part of the proceeds of a crime committed by him or by another person, commits an offence.
[Act No. 51 of 2012, s. 3.]
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5. Failure to report suspicion regarding proceeds of crime
A person who willfully fails to comply with an obligation contemplated in section
44(2) commits an offence.
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6. Defence
If a person is charged with committing an offence under section 3, 4 or 5, that person may raise as a defence the fact that he had reported a suspicion under the terms and conditions set forth in section 44 or, if the person is an employee of a reporting institution, that he has reported information pursuant to section 47(a).
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7. Financial promotion of an offence
A person who, knowingly transports, transmits, transfers or receives or attempts to transport, transmit, transfer or receive a monetary instrument or anything of value to another person, with intent to commit an offence, that person commits an offence.
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8. Tipping off
(1) A person who-
(i) knows or ought reasonably to have known that a report under section
44 is being prepared or has been or is about to be sent to the Centre;
and
(ii) discloses to another person information or other matters relating to a report made under paragraph (i).
(2) In proceedings for an offence under this section, it is a defence to prove that the person did not know or have reasonable grounds to suspect that the disclosure was likely to prejudice a report made under subsection (1).

[Act No. 51 of 2012, s. 4.]

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9. Misrepresentation
A person who knowingly makes a false, fictitious or fraudulent statement or representation, or makes, or provides, any false document, knowing the same to contain any false, fictitious or fraudulent statement or entry, to a reporting institution, or to a supervisory body or to the Centre, commits an offence.

1 1. Failure to comply with the provisions of this Act
(1) A reporting institution that fails to comply with any of the requirements of sections 44, 45 and 46, or of any regulations, commits an offence.
(2) In determining whether a person has complied with any requirement of the provisions referred to in subsection (1), the court shall have regard to all the circumstances of the case, including such custom and practice as may, from time to time, be current in the relevant trade, business, profession or employment, and may take account of any relevant guidance adopted or approved by a public authority exercising supervisory functions in relation to that person, or any other body that regulates or is representative of the trade, business, profession or employment carried on by that person.
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12. Conveyance of monetary instruments to or from Kenya
(1) A person intending to convey monetary instruments in excess of the amount prescribed in the Second Schedule to or from Kenya shall, before so doing, report the particulars concerning that conveyance to a person authorised by the regulations for that purpose.
(2) A person authorised to receive a report made in subsection (1) shall, without delay, send a copy of the report to the Centre.
(3) A person who willfully fails to report the conveyance of monetary instruments into or out of Kenya, or materially misrepresents the amount of monetary instruments reported in accordance with the requirements of subsection (1) commits an offence.
(4) Any monetary instrument used in a suspected violation of subsection (3), or which an authorised officer has reasonable grounds to suspect is tainted property, may be temporarily seized by an authorised officer for as long as is necessary to obtain a court order pursuant to section 68 or 82, but not later than five days.
(5) An authorised officer making a temporary seizure under subsection (4) shall give the person from whom the monetary instruments are seized-
(a) a receipt specifying-
(i) the name, agency, rank of the seizing officer; (ii) contact information for that officer and agency; (iii) time, date and location of seizure;
(iv) description (including serial numbers) of the value of and types of instruments seized; and
(b) a formal notice of the authorised officer’s intent to initiate forfeiture proceedings under this Act against the seized monetary instruments.
(5A) An authorised officer shall, upon discovery of a false declaration or disclosure of monetary instruments or a failure to declare or disclose them, enquire from the person in whose possession the monetary instruments are found the origin thereof and their intended use, and shall record the same in writing signed by the person in possession of the monetary instruments and countersigned by himself.

(5B) The authorized officer shall indicate in the prescribed form-
(a) the amount comprised in the monetary instruments declared or disclosed; and
(b) the identity of the bearer of the monetary instruments,
and such information shall be retained for not less than seven years.
(5C) The information provided under subsection (5B) shall be used by the appropriate authorities when-
(a) the subsequent declaration by the same person exceeds the prescribed threshold specified in the Fourth Schedule; or
(b) there is false declaration; or
(c) there is suspicion of the commission of any other offence.
(6) An authorised officer, other than Agency Director, shall immediately but not later than five days surrender monetary instruments seized under subsection (4) to the Agency Director in such manner as the Agency Director may direct.
(7) If the authorised officer fails to obtain an order under section 68 or 82 against the temporarily seized monetary instruments within five days from the date of seizure pursuant to subsection (4), then, unless that period is otherwise extended by the Court, the monetary instruments shall be returned forthwith to the person from whom it was taken.

13. Misuse of information
(1) A person who knows or ought reasonably to have known-
(a) that information has been disclosed under the provisions of Part II; or
(b) that an investigation is being, or maybe, conducted as a result of such a disclosure,
and directly or indirectly alerts, or brings information to the attention of another person who will or is likely to prejudice such an investigation, commits an offence.
16. Penalties
(1) A person who contravenes any of the provisions of sections 3, 4 or 7 is on conviction liable-
(a) in the case of a natural person, to imprisonment for a term not exceeding fourteen years, or a fine not exceeding five million shillings or the amount of the value of the property involved in the offence, whichever is the higher, or to both the fine and imprisonment; and
(b) in the case of a body corporate, to a fine not exceeding twenty-five million shillings, or the amount of the value of the property involved in the offence, whichever is the higher.
(2) A person who contravenes any of the provisions of sections 5, 8, 11(1) or
13 is on conviction liable-
(a) in the case of a natural person, to imprisonment for a term not exceeding seven years, or a fine not exceeding two million, five hundred thousand shillings, or to both and
(b) in the case of a body corporate, to a fine not exceeding ten million shillings or the amount of the value of the property involved in the offence, whichever is the higher.
(3) A person who contravenes any of the provisions of section 12(3) is on conviction, liable to a fine not exceeding ten percent of the amount of the monetary instruments involved in the offence.
(4) A person who contravenes the provisions of section 9, 10 or 14 is on conviction liable-
(a) in the case of a natural person, to imprisonment for a term not exceeding two years, or a fine not exceeding one million shillings, or to both and
(b) in the case of a body corporate, to a fine not exceeding five million shillings or the amount of the value of the property involved in the offence, whichever is the higher.
(5) Deleted by Act No. 51 of 2012, s. 6.
(6) Where any offence under this Part is committed by a body corporate with the consent or connivance of any director, manager, secretary or any other officer of the body corporate, or any person purporting to act in such capacity, that person, as well as the body corporate, shall be prosecuted in accordance with the provisions of this Act.
[Act No. 51 of 2012, s. 6.]
17. Secrecy obligations overridden
(1) The provisions of this Act shall override any obligation as to secrecy or other restriction on disclosure of information imposed by any other law or otherwise.
(2) No liability based on a breach of an obligation as to secrecy or any restriction on the disclosure of information, whether imposed by any law, the common law or any agreement, shall arise from a disclosure of any information in compliance with any obligation imposed by this Act.
[Act No. 51 of 2012, s. 7.]

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18. Client advocate relationship
(1) Notwithstanding the provisions of section 17, nothing in this Act shall affect or be deemed to affect the relationship between an advocate and his client with regard to communication of privileged information between the advocate and the client.
(2) The provisions of subsection (1) shall only apply in connection with the giving of advice to the client in the course and for purposes of the professional employment of the advocate or in connection and for the purpose of any legal proceedings on behalf of the client.
(3) Notwithstanding any other law, a Judge of the High Court may, on an application being made to him in relation to an investigation under this Act, order an advocate to disclose information available to him in respect of any transaction or dealing relating to the matter under investigation.
(4) Nothing in subsection (3) shall require an advocate to comply with an order under that subsection to the extent that such compliance would be in breach of subsection (2).
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19. Immunity where actions are exercised in good faith
A suit, prosecution or other legal proceedings shall not lie against any reporting institution or Government entity, or any officer, partner or employee thereof, or any other person in respect of anything done by or on behalf of that person with due diligence and in good faith, in the exercise of any power or the performance of any function or the exercise of any obligation under this Act.
20. Protection of information and informers
(1) Where any information relating to an offence under this Act is received by the Centre or an authorised officer, the information and the identity of the person giving the information shall be kept confidential.
(2) Subsection (1) shall not apply to information and identity of a person giving the information-
(a) where it is for the purposes of assisting the Centre or the authorised officer to carry out their functions as stated under this Act; or
(b) with regard to a witness in any civil or criminal proceedings- (i) for the purposes of this Act; or
(ii) where the court is of the opinion that justice cannot fully be done between the parties without revealing the disclosure or the identity of any person as the person making the disclosure.

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