This statute provides for reporting and dealing with unclaimed financial assets; to establish the Unclaimed Financial Assets Authority (UFAA) and the Unclaimed Financial Assets Trust Fund (UFATF)
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· This statute was enacted to provide for reporting and dealing with unclaimed financial assets; and to establish the Unclaimed Financial Assets Authority (UFAA) and the Unclaimed Financial Assets Trust Fund (UFATF). The law caters for instances where a person dies, and their beneficiaries or dependants cannot be found to claim the property-whether in cash, shares, or other properties-as to form part of the estate of the deceased for succession purposes.
· At present, the Unclaimed Financial Assets Authority holds unclaimed assets worth about 54.8 billion Kenya Shillings-comprising of Ksh 23. 1 billion Kenya Shillings in cash and stocks/shares worth about 30 billion Kenya Shillings-as of December 2021.[1] It is estimated that there are assets worth up to 241 billion Kenya Shillings that are yet to be surrendered to the Unclaimed Financial Assets Authority.[2] This money and assets are largely held by banks, insurance companies, mobile money phone wallets, SACCOs, utility companies and law firms.
The Authority is required to make efforts towards reuniting these assets with the beneficiaries/dependants of the deceased where they can be found; and where the same cannot be found, the assets devolve to the state (bona vacantia).
The reunification of the unclaimed assets held by the Authority with the intended beneficiaries has been dismal. This robs intended beneficiaries of the necessary capital that would be deployed in purchasing or acquiring housing (from the demand side). On the other hand, the unclaimed assets/cash is simply invested in government securities by the Authority-yet it can be lent to developers to enhance housing supply if the law were to be changed to allow for this. In addition, the surrendering of unclaimed assets to the Authority by various companies and institutions has also been slow, explaining the huge amount of unsurrendered assets.
· Notably however, there have been some reforms towards promoting surrendering of unclaimed assets to the Authority. The Finance Act 2022 has amended section 33 of the Act which imposed a fine of between Ksh 7, 000-50, 000 per day a report on idle assets is withheld or the duty is not performed; and a fine of 25% of the value of the asset for failure to surrender it to the Authority. The amendment which has introduced section 33A now provides for waivers on penalties that would otherwise have been imposed on an entity for not surrendering the assets in time. The amended law now establishes a Voluntary Unclaimed Financial Assets Disclosure Programme-which shall run for 12 months from 1 July 2022-under which holders of assets will be granted relief of penalties and interest on unclaimed assets where they disclose, report and surrender them to the Authority within the set timeline.
[2] ibid.
