Concerns over inactive money laundering law

BY SIMON NDONG'A

Corruption watchdog Transparency International -Kenya (TI) now wants the Proceeds of Crime and Anti-money Laundering Act fully operationalised.

Executive Director Samuel Kimeu said on Friday that the law which was assented to in December 2009 was yet to come into effect, which has hampered efforts to fight money laundering.

Mr Kimeu stated that the government needs to establish the institutions and processes necessary to fight money laundering and related crimes.

"It is worrying that the government is dragging its feet in putting into effect a law that will boost the war against corruption, piracy, drug and human trafficking and other similar crimes," he said.

"The legislation provides for a financial reporting centre to assist Kenya in the identification of the proceeds of crime as well as asset recovery agency."

He further urged the Ministry of Finance to devise a coordinated action plan to facilitate the implementation of the law in a bid to protect the economy and recover stolen assets.

"We are aware that the Central Bank of Kenya (CBK) has tasked one of its departments to pursue some provisions of this legislation. However for Kenya to fully combat money laundering activities, the institutions and processes provided for under the Act must be established," he stated.

"The continued delay in the implementation of the law allows corrupt individuals, drug traffickers and other individuals to benefit from this illicit activity."

The Proceeds of Crime and Anti-Money Laundering Act 2009 seeks to create a comprehensive legislative framework to combat the offence of money laundering in Kenya and to provide for the identification, tracing, freezing, seizure and confiscation of the proceeds of crime among other things.

Before the enactment of the Act, money laundering legislation in Kenya was weak and fragmented.

The Act, which repeals the anti-money laundering provision in the Narcotics Act, applies to all persons whether individual or corporate, and to the proceeds from any criminal activity.

The Central Bank of Kenya Guideline however remains in force and banking and financial institutions will therefore be required to comply with both the Act and the CBK Guideline.

Money laundering under the Act is wide and includes entering into a transaction involving property which one knows or ought to reasonably have known is or forms part of the proceeds of crime regardless of whether such transaction is legally enforceable or not, and which has the effect of concealing or disguising the nature or ownership of the property.

It also involves assisting a person who has committed an offence to avoid prosecution or concealing any proceeds of crime.

The definition also covers acquisition, use or possession of property which at the time of acquisition, use or possession, one knows or ought to reasonably have known that it is or forms part of the proceeds of a crime committed by another person.

Other related offences include assisting someone to benefit from proceeds of crime, malicious reporting, making false or fraudulent statement or entry, and failing to report suspicion of proceeds of crime.

Offences under the Act attract penalties of up to a 14-year jail term and/or a maximum fine of Sh5 million in the case of an individual and Sh25 million for a body corporate or the value of the property involved in the offence, whichever is higher.

Other penalties include criminal forfeiture of the proceeds of crime, civil forfeiture of property including civil proceedings for recovery of property.

Source: Capital