(Nairobi) – Kenya’s National Assembly has suspended the Unclaimed Financial Assets (Amendment) Bill, 2023, over concerns that the proposed changes could be misused, potentially facilitating the transfer of proceeds from economic crimes.
The Unclaimed Financial Assets Authority (UFAA) had introduced the amendment to allow a claimant, who is rightfully entitled to unclaimed assets, to designate a third party to receive the claim. However, during a session of the National Assembly’s Departmental Committee on Finance and National Planning, lawmakers expressed doubts about the implications of such a provision and raised concerns about the lack of clarity regarding its purpose in the parent Act.
The committee, led by Ainamoi MP Benjamin Langat, was particularly troubled by the lack of a clear explanation from the UFAA on the necessity of the amendment. MPs questioned how the proposed changes would affect the administration of the Unclaimed Financial Assets Fund, and whether they could lead to exploitation or misuse of the system.
The bill, which had been submitted as part of the government’s agenda, would have allowed individuals or entities entitled to unclaimed assets to designate someone else to receive the payment or settlement. However, the Acting CEO of UFAA, Caroline Chirchir, admitted that while the authority agreed with the proposed amendments, they had not completed discussions with the Ministry of National Treasury and Economic Planning, which left lawmakers skeptical about the lack of preparation.
“It is a government Bill,” Chirchir told the committee, “but we have not had enough time to consult on the proposed amendment and would like to seek more time.” Her response did not satisfy lawmakers, particularly Kesses MP Julius Rutto, who questioned how the UFAA could be unaware of the bill’s intent when they were supposed to implement it once it was passed.
Rutto’s concerns were echoed by other committee members, including Kitui Rural MP David Mboni, who warned that the amendment lacked sufficient safeguards, opening the door to potential misuse. Mboni raised concerns about what would happen if the designated beneficiary passed away before a claim could be made. Similarly, Chesumei MP Paul Biego questioned the timing of designating a beneficiary and the potential complications that could arise if the intended recipient were no longer alive.
The committee’s chairman, Kuria Kimani, acknowledged the concerns and pledged to seek further clarification from the sponsor of the bill. He also instructed the UFAA to work with the National Treasury to harmonize their position before the committee would revisit the matter in two weeks.
A major issue raised during the session was the treatment of accrued interest on the unclaimed assets. Currently, beneficiaries are not entitled to any interest earned on the assets, which has been a point of contention. The committee members indicated they would review the law to ensure that beneficiaries receive their fair share of any interest earned on the unclaimed funds.
MPs are urging caution and demanding a clearer understanding of the potential impacts of the amendment. They also called for tighter safeguards to prevent abuse and to ensure that the Unclaimed Financial Assets Fund is managed fairly and transparently.