Money laundering continues unabated as watchdogs agencies remain indifferent
The fight against money laundering and illicit financial flows across Kenyan borders could be far from over with agencies tasked to crack down on corrupt and criminal actors are underfunded.
According to the African Parliamentary Network on Illicit Financial Flows and Tax brief, those who enable the movement of illegal cash utilize legal vehicles such as businesses and trusts to hide their ill-gotten gains in offshore accounts.
Money laundering is the unlawful process of converting significant sums of money obtained via criminal activities such as drug trafficking or terrorist financing into legal tender, with Kenya’s burgeoning real estate market largely seen as a magnet for contaminated funds.
Property developers and real estate agents, for example, are known to accept large sums of money from politically exposed individuals in high-ranking government positions and their associates, as well as other suspicious buyers who prefer to “invest” their stolen funds in the con of buying lands and houses. Over the years, Kenya – East Africa’s greatest trading hub – has been branded as the region’s complicit country in assisting persons in evading the rule of law, a label that has deterred potential investors.
Financial Secrecy Index (FSI) research on selected global economies found that prominent institutions in the country were assisting the high and mighty in both the public and private sectors in siphoning public monies and moving “black money” to tax havens with the help of western consultancy firms.
The Ethics and Anti-Corruption Commission (EACC) and Directorate of Criminal Investigations (DCI) confirmed in 2018 that the Attorney-office General’s contacted seven countries in search of information about bank accounts and assets in Kenyan citizens’ names that were suspected to be proceeds of corruption.
The country has been accused of turning a blind eye to money laundering techniques that continue to draw filthy money to East Africa’s largest economy.
Administrative flaws, along with ineffective enforcement techniques, continue to obstruct the country’s capacity to make public a list of individual owners of “shell” firms that hide ill-gotten money in foreign bank accounts in order to avoid paying taxes.
Even when Kenyan legislators introduced an amendment to the Corporations Act of 2015 in October 2020, through section 93A, requiring companies to publish the beneficial owners of their shares in their registry of members, the worry persists.
Beneficial owner under the Act is defined as any natural person who ultimately owns or controls a registered company or on whose behalf transactions are made. But nearly two years since the move was activated, the Beneficial Ownership e-registrar is yet to be accessible to the general public, despite the law being in operation.
