Kenya among world’s notorious money laundering havens
Kenya has been ranked among several countries including Morrocco, Nigeria, Ghana and Benin where money laundering, terror financing and finance fraud are rampant.
According to International Narcotics Control Strategy Report tabled before the US congress in March 2021, it was noted that Kenya-the financial hub of East Africa- remains vulnerable to money laundering in formal and informal sectors.
Criminal activities noted include transnational organized crime, cybercrime, corruption, smuggling, trade invoice manipulation, trade in illegal timber and charcoal, wildlife trafficking, and illicit trade in drugs and counterfeit goods, including sugar and other agricultural products.
The report further says that criminals were using the unregulated networks of hawaladars and other unlicensed remittance systems to facilitate cash-based, unreported money transfers.
“Foreign nationals, including refugees and ethnic Somali residents, primarily use the hawala system to transmit remittances internationally,” the report explains.
Diaspora remittances to Kenya between January to August 2020 amounted to Ksh.195,177,000,000 with a tidy sum being attributed to criminal activities.
The report further notes that Kenya’s vulnerable banking system, wire service, mobile money platforms and an unregulated mobile-lending industry were at the heart of the laundering schemes.
It recommends the implementation of good governance and anti-corruption measures to deal with the vice.
“Despite progress, Kenya needs to strengthen implementation of good governance and anti-corruption measures and improve its AML/CFT regime. Bureaucratic, logistical, and capacity impediments may hinder the investigation and prosecution of financial crimes”
The report also notes that Kenya’s anti-corruption commission, despite making headway in prosecutions and assets seizures was still a long way in terms of technical support and training to handle more complex money-laundering operations.