CIVIL societies’ finances are set to
come under sharp scrutiny of the
state as President William Ruto’s
administration steps up the war
against money laundering.
The government has proposed a law,
which, if enacted, would empower the
Public Benefits Regulatory Authority
to monitor and report NGO finances
to the government.
The Anti-Money Laundering and
Countering Terrorism Financing
Laws (Amendment) Bill, 2025,
seeks to empower the authority to
“safeguard for civil society groups
from the risk of money laundering
and terrorism financing”.
In the endeavour sponsored by Majority leader Kimani Ichung’wah,
a number of agencies and business
players are being brought under the
scrutiny of anti-money laundering
agencies.
Betting firms, retirement benefit
schemes, saccos and sacco owners,
accountants, estate agents and
certified public secretaries are
targeted in the enhanced laws.
Persons engaged in the production
of precious minerals, buying or
brokering of the same, manufacturing
of jewelry and retail selling of
precious stones would be monitored
as well.
For NGOs, the regulator would
oversee and monitor civil society
organisations that are at risk of
terrorism financing.
It would also periodically identify organisations that are likely to be
at risk of terrorism financing abuse.
The authority would also
periodically conduct an assessment
of the terrorism financing risks posed
to public benefit organisations.
The only rider is that while at it,
the state would “ensure the measures
do not undermine the legitimate
operations of the organisations.”
A section of NGOs and civil society
groups have been on the state’s radar
after the June 2024 protests against
President Ruto’s administration tax
proposals.
A number of organisations,
including the US’s Ford Foundation,
were accused of having a hand in the
upheavals that culminated in youth
storming Parliament Buildings.
At the time, government functionaries warned of sanctions
against the public benefits
organisations and their financiers.
Several NGOs have been targeted
in governments’ past crackdowns,
among them the Kalonzo Musyoka
Foundation whose accounts were
frozen on charges it was funding
activities outside its licence.
In the same period, the government
revoked the permit of Evans
Kidero Foundation on allegations
of unexplained cash.
The former
Nairobi governor blamed it on
politics.
In 2017, the NGO Board accused
the Kenya Human Rights Commission
and Africog of operating illegal bank
accounts.
The two entities were
raided by state agents.
Ruto’s administration has also been
calling for scrutiny of the sources
of financing for various NGOs,
especially those at the forefront to
champion human rights.
“The bill seeks to allow the public
benefits regulatory authority to
oversee and monitor public benefits
organisations that are at risk of
terrorism financing in the country,”
Ichung’wah said in the bill’s memo.
Kenya was grey listed by the
Financial Action Task Force (FATF)
on February 24, 2023, following
concerns that the efforts to combat
money laundering were wanting.
A grey list means the country
should work with the FATF to
strengthen anti-money laundering
measures, including improving laws,
enhancing enforcement and ensuring
agencies coordinate better.
Failure to address the issues
could make a country blacklisted,
resulting in severe consequences to
the economy.
“The bill seeks to address the
technical compliance deficiencies
identified arising from the Eastern
and Southern Africa Anti-Money
Laundering Group re-rating and review by FATF and matters
incidental thereto,” Ichung’wah
explained.
If enacted, those who fail to
report transactions to the Financial
Reporting Centre would be liable for
a jail term of seven years or a fine of
not more than Sh10 million or both.
Organisations in breach of the antimoney laundering law would also be
fined Sh20 million for such violations.
The bill has empowered the
Financial Reporting Centre,
supervisory agencies and selfregulating agencies to supervise and
enforce measures to combat the
financing of terrorism.
The centre would supervise
and enforce the implementation
of targeted financial sanctions by
reporting institutions and freeze
funds suspected to be from money
launderers.
The centre is further being
empowered to prevent funds or other
assets from being made available
directly or indirectly to agencies
involved in money laundering.
In the proposed dispensation, the
BCLB would vet proposed significant
shareholders of betting firms,
proposed beneficial owners, proposed
directors, and senior employees.
The board would also be required
to conduct onsite inspections,
offsite surveillance and undertake
consolidated supervision of the firms
under its purview.
