The Financial Reporting Centre (FRC) has announced its plan to introduce a legal framework that will require second-hand car dealers to report all transactions in excess of Ksh1 million.
If approved by the cabinet and the National Assembly, car dealers in the country will be compelled to reveal the identity of buyers and their sources of income.
FRC stated that the move will help curb money laundering and other suspicious financial dealings in the country.
File image of imported vehicles parked at a yard in Mombasa. |Photo| Courtesy|
This will see car dealers be ratified as non-financial reporting entities. Others include casinos, financial managers, and real estate agents.
FRC Director-General Saitoti Ole Maika stated that a survey conducted on second-hand car dealings revealed massive cash transactions, all without question.
He stated that money laundering in the purchase of cars is mostly done in cash, or deposits and subsequent simultaneous installments.
"We are talking from experience. We are not building theories. The risk assessment included people from that sector being part and parcel of that exercise. And so, we were able to interact with motor vehicle dealers," Maika stated.
"Our intention is to mine data on people buying cars from the dealers," he added.
Car dealers will be compelled to provide the names, address, date of birth, ID number, and occupation of buyers. They will also be required to reveal the date of the transaction and the amount transacted.
Imported second-hand cars account for 90 percent of car purchases in the country.
The anti-money laundering agency stated that drug dealers and fraudsters in the country have resorted to buying cars, land, and houses, on most occasions, using cash.
"For them (car dealers), there is a big challenge because it is an industry that's not regulated. Other than the NTSA issuing permit prescribing them as second-hand dealers, it is more or less regulated. This is a challenge in itself," Maika stated.
FRC requires that institutions report all cases of suspicious dealings as to curb money laundering and the circulation of illicit money in the country.
File image of imported vehicles parked at a yard in Mombasa. |Photo| Courtesy|
