Perceived effects of money laundering on international business:A case study of banks in Kenya
Abstract
Money laundering has been defined as the act of a person who engages, directly or
indirectly, in a transaction that involves proceeds of any unlawful activity; or acquires,
receives, possesses, disguises, transfers, converts, exchanges, carries, disposes, uses,
removes from or brings into a country proceeds of any unlawful activity; or conceals,
disguises or impedes the establishment of the true nature, origin, location, movement,
deposition, title of, rights with respect to, or ownership of, proceeds of any unlawful
activity.
International business, being transactions that are devised and carried out across national
boundaries to satisfy the objectives of individuals and organizations, has grown rapidly
and has reached unprecedented proportions due to global linkages brought about by the
advancement in technology and economic integration among other factors. The resulting
growth in international business as a result of globalization has produced many positive
effects. Nevertheless, every coin has two sides, such that the resulting liberalization of
international capital flows and the making of money transfer easier has also led to the
problem of money laundering.
The importance of banking industry in the conduct of international business cannot be
over emphasized. Similarly, the benefits which accrue to the banking industry from
international trade are immense. This study therefore sought to find out the perceived
effects of money laundering on international business in Kenya as a case study of the
banking industry in the country. The broad objective of the study was to find out the main
sources of laundered funds in Kenya and the most significant perceived effect of money
laundering on international business in Kenya.
The study found out that the most significant perceived effect of money laundering on
international business was assets seizure leading to loss of wealth. The study also found
out that the main source of laundered funds in Kenya was corruption.
The study recommends further research into other key sectors of the economy such as real estate;hotel and tourism industry;trade in precious metal;casinos;and the stock market.Further reseach should also be carried to determine how well the country is prepared to tackle the problem of money laundering.
Sponsorhip
University of NairobiPublisher
School of Business, University of Nairobi