Proceeds of Crime and Anti-Money Laundering Act (POCAMLA)

The Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) is the primary legislation in Kenya designed to combat money laundering (ML) and terrorist financing (TF). Enacted in 2009, POCAMLA provides a robust legal framework to:

• Deter and prevent money laundering and terrorist financing activities.
• Identify, trace, freeze, seize, and confiscate proceeds of crime.
• Enhance cooperation between law enforcement agencies and financial institutions in the fight against financial crime.

Key Features of POCAMLA

• Designation of Reporting Institutions: Entities such as banks, financial institutions, casinos, real estate agencies, and other designated professions must report suspicious activities to the Financial Reporting Centre (FRC), Kenya's central AML/CFT intelligence unit.
• Know Your Customer (KYC) Requirements: Reporting institutions must implement customer due diligence (CDD) procedures, including verifying customer identities and assessing risks associated with money laundering or terrorist financing.
• Suspicious Activity Reporting (SAR): Entities must report suspicious transactions or activities to the FRC, aiding authorities in investigating potential financial crimes.
• Asset Freezing and Confiscation: Authorities are empowered to freeze, seize, and confiscate assets suspected of being derived from criminal activities.

Which Kenyan Companies Are Required to Comply with POCAMLA? The Central Bank of Kenya supervises and enforces compliance with POCAMLA. Institutions required to comply include:

• Commercial Banks
• Mortgage Finance Companies
• Microfinance Banks
• Money Remittance Providers
• Foreign Exchange Bureaus
• Digital Credit Providers
• Payments Service Providers
• Mortgage Refinance Companies

Importance of POCAMLA

• Combating Financial Crime: Deters money laundering and terrorist financing, protecting the financial system from criminal misuse.
• Promoting Financial Stability: A robust AML/CFT framework fosters a secure financial environment that attracts legitimate investments.
• Enhancing Global Cooperation: Aligns Kenya's AML/CFT efforts with international standards, facilitating global cooperation in combating financial crimes.
• Risk Assessment in AML Compliance: A key aspect of POCAMLA compliance is conducting an AML risk assessment. This assessment identifies potential money laundering risks and outlines ways to manage them. It must be updated every two years or whenever guidelines change. The process involves:

1. Identifying Risks: Assess risks linked to products, services, customers, locations, and delivery channels.

2. Analysing Data: Evaluate data to determine risk levels within high-risk categories.

3. Assessing AML Compliance Program: Ensure the program provides adequate controls to mitigate identified risks.

Also read: The Central Bank of Kenya Guidelines on Anti-Money Laundering and How to Meet Them

Smile ID and POCAMLA

Smile ID offers automated KYC solutions that help businesses comply with the Central Bank of Kenya’s requirements. Our solutions combine automated KYC, KYB, and AML checks on a single platform, allowing for efficient verification of identity documents and screening against over 1100 global and African sanctions, PEP, and adverse media watchlists.

Our Integration Steps

1. Collect Identification Details: Gather the user's ID number and nationality for KYC and AML checks.
2. Capture Images of Required Documents: Use image capture guides to ensure clear photos, even with older devices.
3. Get Real-Time Results: Receive identity verification results in an average of 2 seconds, enabling quick risk assessment and decision-making.

Our Solutions are: 

• Designed to provide comprehensive AML and KYC coverage across 54+ African countries.
• Easy to integrate with existing systems.

Book a free demo today to learn more about our solutions.