Lawyers have yet again failed to prevent Parliament from passing legislation requiring them to begin revealing questionable financial transactions involving their clients.
Speaker Justin Muturi rejected attempts by MPs with legal backgrounds to oppose modifications to the anti-money laundering bill as unconstitutional.
Several attorneys, headed by Tharaka Nithi legislator George Muruwari, have asked the Speaker to halt the second reading of the Proceeds of Crime and Anti-Money Laundering Bill, 2021.
The Bill, which is just one step away from becoming law, seeks to classify advocates, notaries, and other independent legal experts as reporting bodies for illegal cash transactions.
The State wants to make advocates, notaries, and other independent legal experts obligated to report questionable financial transactions to the Financial Reporting Centre (FRC).
The State, through the FRC, proposed modifications to the Proceeds of Crime and Anti-Money Laundering Act in an effort to close gaps in the fight against illegal cash transactions.
MPs overwhelmingly approved the Bill on its second reading Wednesday, and it now awaits the third reading before being submitted to the President for assent.
“I, therefore, find that Proceeds of Crime and Anti-Money Laundering (Amendment) Bill 2021 is properly before the House and nothing precludes the House from considering the Bill in the remaining stages,” Moses Cheboi, the Deputy Speaker ruled.
The Speaker dismissed the arguments by several MPs who had argued that singling out advocates and accountants among all other professions and designating them as reporting institutions violates Article 27(4) of the Constitution. The speaker said several other professionals including accountants had been designated as reporting agents and therefore including advocates will not amount to discrimination.
“Inclusion of advocates as reporting institutions for suspicious financial transactions in the manner proposed in the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2021 does not, at face value, erode the legal principle of advocate-client confidentiality,” Mr Cheboi ruled.
If FRC has its way, law firms will be required to report suspicious dealings of their clients and keep records of cash transactions totalling at least Sh1 million ($10,000) and above. The targeted transactions relate to buying and selling of property; creation, operation and management of companies as well as management of the bank, savings and shares accounts on behalf of clients.
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