MPs oppose proposed law on financial reporting by lawyers


MPs oppose proposed law on financial reporting by lawyers

Parliament in session. FILE PHOTO | NMG 

MPs who are also lawyers have opposed a plan by the government for advocates to disclose the financial dealings of their clients as proposed in the Finance Bill, 2019, currently under consideration in the National Assembly.

This came as the lawmakers started debating the bill, which provides for revenue collection measures by the national government to finance the Sh3.02 trillion budget for the current financial year.

The bill seeks to raise Sh30 billion on what is projected to be raised to finance the budget.

Clauses 50 and 51 seek to amend the Proceeds of Crime and Anti-Money Laundering Act, which if passed in its current form, will designate advocates, notaries and other independent legal professionals as reporting institutions to the Financial Reporting Centre (FRC).

Though the government argues that the move will help fight rampant acts of money laundering and corruption, lawyers in the House and outside say it will shut their law firms. 


The matter was raised by MPs George Murugara (Tharaka) and supported by Otiende Amollo (Rarieda) and nominated MP Jennifer Shamalla.

All the lawyers including Kipkelion East MP Joseph Limo, who chairs the Finance and National Planning Committee that considered the bill, could move it for debate.

The MP said passing the bill in its current form will make the lawyers special agents of detectives by revealing their clients’ details.

They also noted that the advocate-client confidentiality rule would be violated, making it extremely difficult to practice law in the country.

“It is unprocedural to use the Finance Bill to ventilate amendments which can be done in the Advocates Act,” Mr Murugara added.

Mr Amollo said, “This bill should be withdrawn altogether to pave the way for the Speaker to make a considered ruling.”

He noted that the provision violates the Constitution, the Advocates Act, Law Society of Kenya (LSK) Act and the Evidence Act.

In its report, the Limo-led proposed that the amendment be considered in the form of a substantive bill to allow proper public participation.

Senior Counsel Prof Tom Ojienda was the first to blow the whistle on the “offensive clause” saying that the reporting obligation, which the bill seeks to place on the advocates, already lies with the financial institutions.

“This is akin to placing the advocates in the same category as casinos. I consider that this constitutes double reporting and that revealing the financial dealings of their clients will expose practicing lawyers to danger,” Prof Ojienda said when eh appeared before the Limo committee sometimes back.

But even as Speaker Muturi promised to issue a ruling on the constitutionality of the proposal on today (Thursday) Afternoon, leader of minority John Mbadi (Suba South) proposed that the amendment be withdrawn and brought as a substantive bill to allow members to dispense off the Finance Bill.

Leader of majority Aden Duale (Garissa Township) said as much as he had issues with the Finance Bill, it would not be possible to withdraw it since it has timelines and must be passed by September 30.

“As much as we want to raise concerns in the bill, we must put into consideration that it has constitutional timelines,” Mr Duale said.

Minority whip Junet Mohammed (Suna East) was the lone member supporting the provision.

“In the interest of accountability and transparency in this era of illicit trade and terrorism, lawyers must be made to disclose the money they hold for their clients who might be suspects of such crimes,” he said.

Kiambu Town MP Jude Jomo also sought withdrawal of clause 48 on the amendment proposing to repeal section 33 (b) of the Banking Act that introduced interest rate capping.

Mr Jomo wants the matter addressed in his amendment bill currently before the House.

But Speaker Muturi overruled him saying his bill was still active in the House.

“Your objection is premature,” he said.

Credit: Source link