Central Bank of Kenya has cracked the whip against the Absa Bank in Kenya for failure to conduct proper tracing of the source of money in a flagged transaction in March 2020. Consequently, the regulator has slapped the bank with a week- from Thursday, April 9 to Wednesday, April 15, 2020- suspension from trading in forex.
In a statement, CBK notes that this failure contravenes anti-money laundering regulations which stipulates adherence to the proper tracing of funds passing through the bank.
A statement by CBK reads, “In investigating these and other earlier transactions it is evident that Absa Kenya did not have a satisfactory assurance of the underlying commercial transactions supporting these trades, as is required, nor did the bank ensure the standard checks on anti-money laundering and combating the financing of terrorism (AML/CFT) and know-your-customer (KYC) requirements were applied.”
Kenya has been keen to contain the flow of illicit money over a couple of years with the CBK going at lengths to ensure this stops. Last year, the CBK rolled out new notes that were part of a bigger scheme to curtail the proceeds of crime entering its jurisdiction.
Absa is required to put in place a robust framework that ensures all relevant documents for such foreign exchange transactions are available as required by law, the CBK added. ” Absa Kenya’s acknowledgment of its obligations as an authorized foreign exchange dealer and its commitment to address the underlying issues is noted. CBK reiterates the objective of building sound, fair and transparent financial markets, anchored in the law
and according to global best practices.
Kenya has signed and ratified all of the United Nations’ (UN) Conventions on combating Money Laundering and the Financing of Terrorism.
Absa, though a new brand in Kenya after changing from Barclays Bank, has longtime know-how of the Kenyan forex market.
Absa Kenya is part of the Absa Group Limited, one of South Africa’s largest financial services organizations, serving personal, commercial and corporate customers in South Africa. The Absa Group Limited (Absa) is listed on the JSE Limited
The new brand has faced various challenges. Just last week, Vodacom Group entered into a court case suing Absa for losses of at least US$64.1 million it claims it incurred due to an alleged unauthorized payment by Absa’s Tanzanian subsidiary from Vodacom’s accounts to that country’s tax agency last year