Recent amendments to the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) implemented in 2023 bring significant changes for Saccos regulated by the Sacco Society Regulatory Authority (SASRA). Parliament introduced these legal updates to enhance the country’s framework for supervising Anti-Money Laundering (AML), Combating Terrorism Financing (CTF), and Countering Proliferation Financing (CPF), aligning with guidelines from the Financial Action Task Force (FATF).
The revised Anti-Money Laundering and Combating Terrorism Financing Laws (Amendment) Act, 2023 modifies several existing financial sector laws, including the Capital Markets Act, Insurance Act, Banking Act, and others.
With the new amendments, Saccos are now required to address not only money laundering but also specifically CTF and CPF. This expands the scope of POCAMLA to include measures against financing terrorism and proliferation under Section 2A, increasing obligations for reporting institutions and supervisory bodies.
Regulated Saccos must now report any suspicious transactions exceeding USD 15,000 (about Ksh1.935 million) to the Financial Reporting Centre (FRC) within two days of detection. Previously, the threshold for reporting was USD 10,000, with a reporting window of five days.
Additionally, Saccos have the authority to implement enhanced due diligence measures based on risk, especially concerning higher-risk countries. A new provision under Section 45(A)(2) allows these institutions to adopt stricter counter-measures tailored to the potential risks presented by their clients.
The amendments also expand the scope of customer due diligence, requiring institutions to consider both materiality and risk when engaging with customers. As part of their supervisory role, SASRA now has the authority to impose sanctions on Saccos that fail to comply with POCAMLA, a power that was previously lacking.
Overall, these changes aim to bolster the fight against financial crime within the cooperative sector, making compliance essential for all regulated Saccos.
