Post by job on May 30, 2007 17:47:49 GMT 3
Has Kenya become a sanctuary for drugs and dirty money?
Story by ROBERT SHAW
Publication Date: 5/30/2007
KENYA IS AN ACTIVE PARTY to one of the world’s most pervasive scourges and criminal activities: massive international drugs and armaments trafficking, together with its bedfellow, international money laundering.
Even worse, the Government is a knowing, and indeed willing, accessory to this intertwined web of crimes.
We may not know the extent of the narcotics that pass through Kenya, although we are aware that it is taking place. Further to that, we suspect it is not insignificant.
What is clearer is that Kenya has become one of the fastest-growing money-laundering centres in the world. In short, our country has become a centre for sanitising the proceeds of money acquired from the trafficking of drugs and armaments, and the tax evasion that accompanies these activities.
IT COMES IN AS DIRTY MONEY, MORE often than not in cash, and after a series of processes involving some of Kenya’s plethora of forex bureaus and banks, ends up outside Kenya as clean, legitimate money.
This is not only serious in its own right, but such activities undermine legitimate financial activity and drain the economy in many different ways.
Why is the Government a facilitative party to this?
Because, international money laundering is not a criminal activity in Kenya. All that can happen to a financial institution here that is caught or suspected of money laundering is that it is punished or warned by the Central Bank of Kenya. That usually involves a fine, or at best, a wrap on the knuckles.
As things stand, money laundering is an offence under the CBK regulations, but is not a criminal offence under the Laws of Kenya.
Attorney-General Amos Wako can respond by saying that the Government has drawn up anti-money laundering legislation and that it has received its first hearing in Parliament.
True, but how many years has Mr Wako been promising such a Bill and why has it taken so long for him to put forward a piece of legislation that in many countries is an integral part of the statutes?
About two years ago, he promised such a Bill. It is not as if such proposed legislation is rocket science. There are many templates around the world.
Indeed, ‘‘the Proceeds of Crime and Anti Money Laundering Bill of 2006,’’ has much in common with current South African legislation against money laundering. The only conclusions can be laxity on his part or pressures of vested interests to resist it.
Concerning the latter, considering how lucrative money laundering is, there are undoubtedly some powerful forces with a lot of money working against it (Anti Money laundering Bill).
It is estimated that the current premium for cleaning up money through laundering is in the region of 20 per cent to 25 per cent.
It is imperative that two things happen in the next couple of months to rectify this gross anomaly. First, Parliament must move expeditiously to pass the various hearings of this anti-money laundering legislation within the decreasing time-span left in this session.
Secondly, the relevant committee must go through the Bill with a toothcomb and make sure that when it becomes law, it is both effective, and that the relevant bodies that implement it are not subjected to undue influence or interference.
Arguably, one of its conspicuous weaknesses is to do with lack of independence of the bodies entrusted with the work. For example most members of the Anti-Money Laundering Advisory Committee will come from Government.
THE FINANCE MINISTER WILL appoint the director and deputy director on the advice of this Government-loaded committee. Even worse, the Attorney-General will appoint the director of the Assets Recovery Agency and the agency will operate with staff seconded from the former’s office.
In effect, the minister for Finance and the Attorney-General are likely to have undue influence over such an operation.
There are also some weaknesses to do with the Bill’s linkages to such other offences as narcotics and organised crime, or those that instigate such crimes.
There is also some tightening up needed on the requirements by reporting institutions such as banks in the areas of large transactions, due diligence and the reporting of beneficial owners.
Story by ROBERT SHAW
Publication Date: 5/30/2007
KENYA IS AN ACTIVE PARTY to one of the world’s most pervasive scourges and criminal activities: massive international drugs and armaments trafficking, together with its bedfellow, international money laundering.
Even worse, the Government is a knowing, and indeed willing, accessory to this intertwined web of crimes.
We may not know the extent of the narcotics that pass through Kenya, although we are aware that it is taking place. Further to that, we suspect it is not insignificant.
What is clearer is that Kenya has become one of the fastest-growing money-laundering centres in the world. In short, our country has become a centre for sanitising the proceeds of money acquired from the trafficking of drugs and armaments, and the tax evasion that accompanies these activities.
IT COMES IN AS DIRTY MONEY, MORE often than not in cash, and after a series of processes involving some of Kenya’s plethora of forex bureaus and banks, ends up outside Kenya as clean, legitimate money.
This is not only serious in its own right, but such activities undermine legitimate financial activity and drain the economy in many different ways.
Why is the Government a facilitative party to this?
Because, international money laundering is not a criminal activity in Kenya. All that can happen to a financial institution here that is caught or suspected of money laundering is that it is punished or warned by the Central Bank of Kenya. That usually involves a fine, or at best, a wrap on the knuckles.
As things stand, money laundering is an offence under the CBK regulations, but is not a criminal offence under the Laws of Kenya.
Attorney-General Amos Wako can respond by saying that the Government has drawn up anti-money laundering legislation and that it has received its first hearing in Parliament.
True, but how many years has Mr Wako been promising such a Bill and why has it taken so long for him to put forward a piece of legislation that in many countries is an integral part of the statutes?
About two years ago, he promised such a Bill. It is not as if such proposed legislation is rocket science. There are many templates around the world.
Indeed, ‘‘the Proceeds of Crime and Anti Money Laundering Bill of 2006,’’ has much in common with current South African legislation against money laundering. The only conclusions can be laxity on his part or pressures of vested interests to resist it.
Concerning the latter, considering how lucrative money laundering is, there are undoubtedly some powerful forces with a lot of money working against it (Anti Money laundering Bill).
It is estimated that the current premium for cleaning up money through laundering is in the region of 20 per cent to 25 per cent.
It is imperative that two things happen in the next couple of months to rectify this gross anomaly. First, Parliament must move expeditiously to pass the various hearings of this anti-money laundering legislation within the decreasing time-span left in this session.
Secondly, the relevant committee must go through the Bill with a toothcomb and make sure that when it becomes law, it is both effective, and that the relevant bodies that implement it are not subjected to undue influence or interference.
Arguably, one of its conspicuous weaknesses is to do with lack of independence of the bodies entrusted with the work. For example most members of the Anti-Money Laundering Advisory Committee will come from Government.
THE FINANCE MINISTER WILL appoint the director and deputy director on the advice of this Government-loaded committee. Even worse, the Attorney-General will appoint the director of the Assets Recovery Agency and the agency will operate with staff seconded from the former’s office.
In effect, the minister for Finance and the Attorney-General are likely to have undue influence over such an operation.
There are also some weaknesses to do with the Bill’s linkages to such other offences as narcotics and organised crime, or those that instigate such crimes.
There is also some tightening up needed on the requirements by reporting institutions such as banks in the areas of large transactions, due diligence and the reporting of beneficial owners.
