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(Jan 08, 2010) On January 1, 2009, the DAILY NATION reported that Kenyan President Mwai Kibaki had signed into law The Proceeds of Crime and Anti-Money Laundering Bill, which was passed by the country's parliament in December. (Peter Leftie, New Law Against Money Laundering Signed, DAILY NATION, Jan. 1, 2010, available at http://www.nation.co.ke/News/-/1056/834562/-/voq05c/-/index.html.)

The law introduces different measures to stop money laundering, by way of tracing, freezing, and seizing illegally obtained funds. (Id.) According to the bill, any person "who knows or who ought reasonably to have known" that a particular property is in full or in part the fruit of a crime and who participates in "concealing or disguising the nature, source, location, disposition or movement of the said property or the ownership thereof" commits the offense of money laundering. (Art. 3, The Proceeds of Crime and Anti-Money Laundering Bill 2009, KENYA LAW REPORTS website, http://www.kenyalaw.org/Bills/ (last visited Jan. 5, 2010) (unofficial source).) A person who commits such a crime is, on conviction, subject to a penalty of up to 14 years in prison and/or a fine of up to KES5 million (about US$65,876) and/or the amount of the value of the property involved in the offense. (Art. 17, id.) If the crime was committed by a juridical person, the penalty is a fine not exceeding KES25 million (about US$329,380) or the amount of the value of the property involved in the offense, whichever is higher. (Id.)

Some observers are skeptical that this new law will bring about any meaningful solution to Kenya's money laundering problem. According to George Kegoro, Executive Director of the Kenyan chapter of the International Commission of Jurists, it is going to take more than just enacting legislation to stop money laundering activities in Kenya. (Susan Anyangu-Amu, Anti-Money Laundering Bill Passes, But Does Govt Mean Business?, IPS, Dec. 29, 2009, available at http://ipsnews.net/news.asp?idnews=49841.) Kegoro states:

The existence of the legislation is not sufficient to deter the vice [and] neither are the stiff penalties that are recommended in the bill. ... There is need for genuine support from the government to enact this law. We need a good set of people to be put in place to interpret the legislation. (Id.)

According to Job Ogonda, Executive Director of the international corruption watchdog Transparency International, if previous attempts at curbing corruption in Kenya (including the Public Procurement and the Public Officers Ethics Act) are any indication, the new law will not have any noticeable effect. (Id.)

A 2004 report by a U.K. firm commissioned by the Kenyan government to document wealth acquired through corruption showed that, at the time, about US$1.7 billion was parked in offshore accounts. (Id.) A recently published United States Department of State report indicates that US$93 million in drug money is annually laundered through Kenya's financial system. (Id.)

Author: Hanibal Goitom More by this author
Topic: Money laundering More on this topic
Jurisdiction: Kenya More about this jurisdiction

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Last updated: 01/08/2010