Unclaimed Financial Assets Should Support Philanthropy

By Nicanor Sabula

Kenya has embarked on a journey to formulate legislation on unclaimed asset. The publication of the Unclaimed Financial Assets Bill 2011, as expected has stirred up a hornet‟s nest. Interest groups consisting of mainly financial institutions and some Kenyans based in the diaspora are concerned that the Bill gives government bureaucracies unfettered access to what is considered public’s hard earned cash. Controversy surrounds a proposal in the Bill to declare financial assets unclaimed after a period of only three years. There are also worries that a body proposed to manage the un-claimed assets, the Unclaimed Financial Assets Authority, will have heavy government influence fuelling fears that this will pave way for pilferage and misuse of the funds. Philanthropists and those working for charity organisations will however be disappointed to learn that the proposed Bill contrary to expectations, has failed to make proposals on how the unclaimed assets would benefit charity causes. Controversies around the process of formulating legislation on unclaimed assets are not new, and neither is it unique to Kenya. The world over, attempts to introduce regulation around unclaimed assets have been met with strong resistance from the usual suspects; financial institutions, who honestly profiteer unjustly on assets that do not belong to them. It is a well known fact that some financial institutions use unclaimed assets to bolster their financial performances. A recent attempt in Britain resulted in a watered down, Dormant Bank and Building Society Accounts Act 2008. British financial institutions put up a spirited fight that saw a Bill, first proposed by Gordon Brown when he was the Chancellor, reduced into a shell. In the US, the Uniform Unclaimed Property Act 1995, despite being enacted close to two decades ago is yet to be fully adopted by all States. After reviewing the proposed Bill, I have come to a conclusion that even though it has some serious limitations and areas that require re-evaluation, it is generally a good law for Kenyans. Read More

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