Kenyan corporate executives, including CEOs, board members, and financial sector managers, now face career-ending sanctions.
They also risk up to seven years’ jail term under the anti-terrorism and proliferation financing laws.
The amendments target financial institutions and designated non-financial businesses and professions (DNFBPs).
Which means the regulations place direct accountability on CEOs, board members, and senior managers.
The laws took effect on November 20, 2024, after Interior Cabinet Secretary Kithure Kindiki signed into law the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Prevention, Suppression and Disruption of Proliferation Financing) (Amendment) Regulations, 2024.
A person or entity that contravenes the provisions of these Regulations commits an offence and shall be liable on conviction to a fine not exceeding three million shillings or to imprisonment for a term not exceeding seven years.
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Kenyan CEOs and Managers Who Risk Getting Fired
Apart from criminal charges, the regulations grant supervisory bodies such as the Financial Reporting Centre (FRC), Central Bank of Kenya, and other regulators the power to impose other administrative sanctions.
However, the measures are especially tough on senior management.
“These provisions clearly indicate that individuals in leadership and management positions, including CEOs, face direct and severe consequences, including potential imprisonment and career-ending administrative actions,” adds The Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Suppression of Terrorism) Regulations, 2023 laws.
If a CEO or manager is implicated in violations of the anti terrorism laws, they could not only lose their job, but also their ability to work in the sector again.
They include;
- Stopping violators from working in the sector related to the violation.
- Suspending managers, board members, and executive leadership has proven to be responsible for breaches.
- Constraining the powers of directors or executives pending the appointment of inspectors.
- Restricting or suspending business activity.
- Cancelling licences outright.
“The supervisory authority may suspend managers, board of directors, and executive management members who are proven to be responsible for the violation for a period to be determined or request their removal,” the regulations note.
At the same time, the 2024 regulations also introduced new clarity on technical terms and processes.
The term “Delisting” means officially removing a name from a UN sanctions list, which requires immediate unfreezing of assets.
Substitution of the word “freezing order” with “freezing action”, aligning Kenya’s terminology with international standards.
“Upon receipt of the notice … designated non-financial businesses and professions holding targeted funds or other assets shall respect the delisting and unfreeze the funds or other assets.”
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Public Participation and Consultation
The Ministry of Interior and National Administration began public participation for the regulations in September 2023, after President William Ruto assented to the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2023.
In the call for submissions, the government invited feedback from key institutions, including the Kenya Bankers Association (KBA), Law Society of Kenya (LSK), Institute of Certified Public Accountants of Kenya (ICPAK) and the Kenya Private Sector Alliance (KEPSA).
Additionally, the The National Treasury & Economic Planning, Ministry of Foreign Affairs, Director of Public Prosecutions (DPP), Central Bank of Kenya (CBK), and the National Counter-Terrorism Centre (NCTC) were invited for public participation.
These stakeholders were given until October 2, 2023, to submit memoranda, ensuring that professional, legal, and financial bodies contributed to shaping the final regulations.
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