So here we are, with more agenda items for your Board to tackle in the next financial year. We know, the Secretary is just about to sign off the Board Almanac for the following financial year, but if we are honest, the Board could benefit from a new area of compliance to review, and one which has the public good in mind.

In February 2024 the Financial Action Task Force (FATF) placed Kenya on the ‘grey list’ which is a list of countries which are deficient in their Anti- Money Laundering and Combating the Financing of Terrorism (AML/CFT) systems. Even though it is supposed to encourage corrective measures, countries on the grey list and by extension their companies and citizens, face onerous hurdles when they seek external financing from external financiers or when they approach international investors for funding.

That should concern us all as we live in a global world and despite Kenya being a promising investor destination, we could be missing out on significant funds and investor flows due to this.

So what is the role of your Board of Directors in combating against AML/CFT? The first thing is for the Board, to get an overview of the Proceeds of Crime and Anti Money Laundering Act Cap 59B and its regulations, including finding out whether it is to be registered as a reporting institution or as a designated non financial business or profession.

Other roles for the Board include:
1. As you embed AML/CFT in your compliance frameworks, ensure that there is reporting on any concerning activities or receipt of funds that could jeopardise the company.
2. The Board should encourage management to draft and embed AML/CFT policies that build the internal controls in the organisation.
3. Ensure Management and staff are empowered, through training and continued emphasis on the code of ethics and integrity of the company whilst encouraging safety for the reporting of any suspicious activities.

If your company is already on its AML/CFT journey it may be time to carry out an independent audit, to confirm the adequacy of controls and provide areas of improvement. This can be the extension of the external auditors tasks, after an internal audit review who are the second line of defence for the organisation. This means that the internal audit plan for 2025 could be reviewed to include this focus on the company’s internal controls.

So what should an independent AML/CFT Audit achieve?
1. Alignment of internal controls to the company’s AML/CFT risk levels.
2. Confirming the compliance levels of the company to its own internal AML/CFT processes.
3. Reviewing the records (if any) of any suspicious activities recorded.
4. Checking the understanding of the Board, Management and Staff on their responsibilities towards compliance.

Getting our country off the FATF list is a collective effort and soon, Akira Consult Limited shall be offering AML/CFT related services. Reach out to us today! www.akiraconsult.ke.