Motor vehicle buyers will be required to declare their personal information including their income in new anti-money laundering measures by the government.
The Financial Reporting Centre is seeking to introduce a policy that will compel car dealers to report all transactions above Ksh 1 million.
FRC acknowledged that second-hand cars contribute to 90 percent of all car purchases in Kenya, a sector that has become an avenue for money laundering.
“Our intention is to mine data on people buying cars from the dealers,” FRC Director-General Saitoti ole Maika explained adding that the details sought include names, addresses, date of birth, ID numbers as well as the occupation of every purchaser.
The money-laundering watchdog noted that drug dealers, the corrupt and fraudsters have an affinity for purchasing cars, houses and land, often in cash.
Owners of illicit cash are known to buy second-hand cars and sell them off to clean their money.
“For them (car dealers) it is a big challenge because it is an industry that’s not regulated. Other than NTSA issuing permits prescribing them as second hand car dealers, it is more or less unregulated,” the FRC boss said.
The Proceeds of Crime and Anti-Money Laundering Act makes it mandatory for financial and designated non-financial institutions and professionals to report any suspicious or unusual transaction to the FRC.
Car dealers will be included in the list of designated non-financial institutions and professionals.
Speaking about the proposal, the auto dealers say they will have no choice but to capture the required data if the law is passed.
“Since we are trading internationally, sources of income or how you do business must follow the international laws. They are very strict and have not been following,” Kenya Auto Bazaar Association (KABA) Chairman John Kipchumba said.
“Our members will have to start following the rules because if you go to banks you cannot deposit Ksh 1 million without saying where you got it from, so it's one of those things we will have to follow because all other nations are abiding,” he added.
