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Operationalise the Proceeds of Crime and Anti Money Laundering Act now

Emerging incidents of corruption, piracy, terrorism, human and drug trafficking provide a case for the speedy implementation of the Proceeds of Crime and Anti Money Laundering Act 2009. This legislation came into force on June 30th, 2010 but questions abound over the government’s action towards its effective implementation. To date the requisite structures aimed at facilitating the identification, tracing, freezing, seizure, confiscation and repatriation of the proceeds of crime are yet to be established. As a result, the flow and laundering of ill-gotten wealth continues as if the law did not exist.

It is estimated that close to 700 billion shillings obtained through corruption and other criminal activities has been hidden abroad during the past and present regimes; these include the proceeds of the Goldenberg and Anglo-Leasing scandals. The progress in holding to account those responsible for these cases of corruption has been dismal. The arrest warrants issued in the UK against former Kenya Power and Lighting Company Managing Director Samuel Gichuru and Nambale MP Chris Okemo for alleged money laundering, therefore offer some hope that public officials and other individuals suspected of looting public funds will have their day in court and if found guilty will be brought to book and the stolen assets will be recovered and channeled back to finance Kenya’s besieged economy.

The tracing and repatriation of stolen assets is no easy task, but the anti-money laundering regime is aimed at coordinating recovery efforts as well as stemming attempts to siphon dirty money in repositories abroad or investing it in seemingly legitimate ventures in the country. It is therefore worrying that the government is dragging its feet in putting to effect a law that will boost the war against corruption, piracy, drug and human trafficking and other similar crimes. The legislation provides for a Financial Reporting Centre to assist Kenya in the identification of the proceeds of crime (Article 19) as well as an Asset Recovery Agency to be charged with tracing and recovering looted assets (Article 49). We are aware that the Central Bank of Kenya has tasked one of its departments to pursue some provisions of the legislation. However for Kenya to fully combat money laundering activities the institutions and processes provided for must be established.

The continued delay in the implementation of the law permits corrupt individuals, drug traffickers and other criminals to benefit from these illicit activities and allows them to finance further criminal activity, and to evade the law thus raising the incidence of crime in the country. The delay is also setting up the financial sector for failure as ventures financed by illicit money are creating unhealthy and unfair competition and as a result eroding investor confidence.

The Ministry of Finance must swiftly devise and unveil a coordinated action plan to facilitate the implementation of this crucial law to protect the economy and recover stolen assets that are desperately required to finance Kenya’s development and reform agenda. Parliament needs to ensure that this law is implemented in a timely and effective mannerand that resources are set aside in the budget for the operationalisation of the law.

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Sheila Masinde
T: +254 20 2730324/5 or 2727763/5 +254 722-296589
E: [email protected]