Suspicious Transaction Reports for Kenya Property Professionals: What You Must Do

A Suspicious Transaction Report (STR) is a formal report that a designated Non-Financial Business or Profession (DNFBP) must file with the Financial Reporting Centre (FRC) when they have reasonable grounds to suspect that a transaction involves proceeds of crime or terrorism financing.

After POCAMLA 2025, Kenya advocates handling property transactions and real estate agents are reporting entities. Filing STRs when required is now a statutory obligation, not a choice.

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When an STR Is Required

An STR must be filed when a reporting entity has "reasonable grounds to suspect" that:

A transaction, intended transaction, or attempted transaction involves proceeds of crime. A transaction is structured to facilitate money laundering. A transaction relates to terrorism financing.

The threshold is "reasonable grounds to suspect" — not certainty, not proof. If something looks wrong and a reasonable professional in your position would be concerned, you should file.

Common property transaction red flags that may trigger an STR:

Cash purchases of high-value property. Large cash payments without verifiable banking trail are a classic money laundering indicator.

Purchase price significantly above market value. Overpaying for property is sometimes used to move money — the "overpayment" becomes untraceable.

Purchase price significantly below market value. Underpayment with informal side payments suggests an attempt to under-declare the transaction value.

Buyer cannot explain the source of funds. A client who is unable or unwilling to explain where their purchase funds come from is a high-risk client.

Third-party payments. The purchase price is paid by someone other than the registered buyer, without a clear legitimate explanation.

Rapid resale. A property bought and sold at a profit within a very short period without any development.

Complex ownership structures with opaque beneficial ownership. A chain of companies whose ultimate owner cannot be identified.

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How to File an STR

Step 1: Complete the STR form. The FRC provides the STR form on their portal (frc.or.ke). The form requires:

A description of the transaction. Why you suspect it involves proceeds of crime. The identities of the parties involved. The amount involved.

Step 2: File electronically. Submit through the FRC's online reporting portal.

Step 3: Do not tip off the client. Once you have decided to file an STR, you must not inform the client that you have done so ("tipping off" is itself a criminal offence under POCAMLA).

Step 4: Keep your own record. Retain a copy of the STR and the circumstances that prompted it in a confidential file.

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The Tipping Off Prohibition

Tipping off means informing a person that you have filed, or intend to file, an STR about them.

This is a criminal offence under POCAMLA. The purpose is to prevent suspects from being alerted by their professional advisors before the FRC and law enforcement can act on the intelligence.

If a client asks directly whether you are filing an STR, you are not required to answer. You should consult your own legal adviser about how to handle such inquiries.

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Protection for Bona Fide Reporters

A professional who files a bona fide STR in good faith is protected from liability. Filing an STR that turns out to be wrong does not expose you to a claim from the client, provided you acted in good faith based on the information available.

This protection is important: professionals sometimes hesitate to file because they are concerned about the consequences if they are wrong. The law provides protection specifically to encourage reporting.

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What Happens After You File

The FRC analyses the STR as part of its financial intelligence function. The FRC does not tell you what happened as a result of your report. You may never know whether the intelligence was acted upon.

Your obligation ends with filing. You continue to owe confidentiality to your client on all other matters, but your duty to cooperate with the FRC on money laundering matters takes precedence over the ordinary client-advocate relationship.

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This article is for general information only. It does not constitute legal advice. For STR filing obligations specific to your practice, consult a Kenya advocate specialising in financial crime and regulatory compliance.