THE FRC IMPOSES A MONETARY PENALTY ON A NON-COMPLIANT REPORTING INSTITUTION

The Financial Reporting Centre levied a monetary penalty of KSh. 200,000 on a non-compliant Reporting Institution for failure to take remedial actions as directed following an onsite inspection. In the said onsite inspection, the FRC identified areas of non-compliance, including gaps in the institutions Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) policies and procedures, gaps in the conduct of customer due diligence (CDD) and enhanced customer due diligence (EDD) measures, failure to conduct an independent audit, amongst other non-compliances. The FRC issued a remedial action plan to the entity requiring it to take remedial actions for each identified non-compliance within a specified timeline. The entity failed to adhere to the timelines under the remedial action plan, prompting the FRC to initiate the process of issuing civil and administrative penalties in accordance with the powers granted under Sections 24B and 24C of the Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA). The entity was granted an opportunity to be heard, and thereafter, the FRC levied a monetary penalty which was payable within 14 days of receiving the notice.

The FRC urges all Reporting Institutions to adhere to any instructions, directions or rules issued by the FRC to avoid the imposition of civil and administrative penalties under the POCAMLA.