Kenya Clashes With IMF On Reporting Large Cash Transactions

The International Monetary Fund (IMF) has warned it will continue to put anti-money laundering conditions on its loans to limit theft of the funds, potentially putting it on a collision course with Kenya, which recently lifted some of the measures critical to fighting the vice.
Kenya last month lifted requirement for individuals or businesses to disclose in writing to banks the source and destination of withdrawals and deposits above $10,000 (Sh1.11 million).

This is despite Nairobi being a signatory to the United Nations Security Council’s (UNSC) Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) frameworks that require amounts above this threshold to be reported.
President Uhuru Kenyatta said lifting of the restrictions is meant to help small businesses that heavily rely on cash transactions but whose day-to-day operations have been limited by the stringent reporting rules that are meant to curb money laundering.
The Head of State added that digitisation of banking has increased tracking of illicit financial flows, which was the main target of the rules, and that Kenya still remains committed to the AML/CFT resolutions.

But the IMF now says it will continue putting these stringent provisions into its funded programmes to ensure that the monies are well utilised by the recipient governments.
Sh78.47 billion
This is as Nairobi has grown its dependence on the international lender for budgetary support in recent months, having borrowed a total of Sh78.47 billion from the lender through the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes this year alone to plug a budget deficit.

The IMF, in its June review of the Kenya programme, had asked Kenya to increase monitoring and supervision of transactions involving politically exposed persons and other high risk customers vulnerable to corruption. Kenya told the IMF it had increased monitoring of cash transactions involving large sums of money and flagged 3,000 suspicious transactions, which now contrasts sharply with the move to entirely lift cash transaction reporting.