Rules give Home Affairs the power to freeze billions
Financial institutions, organizations or individuals who fail to report and freeze funds or assets intended for terrorist activities face a fine of 3 million shillings or seven years in prison.
Home Cabinet Secretary Fred Matiang’i has reissued regulations governing the freezing of funds or assets suspected of being proceeds of terrorism in a renewed effort to increase oversight and pocket billions in the fight against dirty money.
New regulations tabled in Parliament will now allow full implementation of the United Nations Security Council (UNSC) resolution on the suppression of terrorism.
The regulations were issued under section 50(1) of the Prevention of Terrorism Act 2022 and repeal the 2013 rules which did not specify when the subsidiary law came into force.
“These regulations may be cited as the Prevention of Terrorism (Implementation of United Nations Security Council Resolutions on Suppression of Terrorism) Regulations 2022, and shall come into force as follows… Regulations 27 and 32 shall come into force effective upon posting,” the rules say.
The new rules came into effect on February 24, 2022, after publication in the Gazette and will apply Rule 27 on penalties.
“A person or entity who contravenes these regulations commits an offense and is liable, on conviction, to a fine not exceeding three million shillings or to imprisonment for a term not exceeding seven years” , states rule 27.
The rules empower the SC of the Interior to order the freezing of the assets of individuals, organizations or entities listed on the UN sanctions lists or any other sanctions list.
The regulations aim to implement resolutions on the financing of terrorism and transactions with weapons of mass destruction.
“Subject to these Regulations, the Secretary to the Cabinet shall, either on his proposal or at the request of the Committee, make an order freezing the property or funds of a Designated Entity, whether held directly or indirectly by the ‘entity or person acting’, states the regulation, which repeals the 2013 regulation.
According to the rules, “freezing” means preventing or restricting the use, transfer, transaction, conversion, modification, concealment, movement or disposal of specific assets or funds without affecting ownership.
An order to freeze assets or funds must include a permanent ban on providing funds or financial services to the designated entity in which the order is made.
The regulations state that a designation or sanctions list issued by the SC of the Interior or the interdepartmental committee is deemed to authorize a reporting institution and any other institution that holds the property or funds of a designated entity to freeze, until further notice, these goods. or funds.
The regulations, which have not been subject to public participation for security reasons, establishes an all-powerful, nine-member interdepartmental committee against the financing of terrorism which will be chaired by the SC of the Interior.
“The functions of the committee are to implement resolutions 1267, 1373, 1718 and 1988 relating to the suppression of the financing of terrorism and the prevention, suppression and disruption of the proliferation and financing of transactions with weapons of destruction massive and other resolutions in accordance with these resolutions,” the regulations read.
The committee will track individuals, organizations or entities holding property or cash believed to have been received, acquired, exchanged, concealed, disposed of, converted, transferred or moved as security or financial services.
The committee will establish a national list of persons, organizations or entities designated in the UN terrorist list.