Implementation and Enforcement of the Law on Money Laundering: an Analysis of Kenya’s Legal and Institutional Framework.

Abstract

Prior to 2009, Kenya did not have a formalised Anti- Money Laundering institutional and legal framework. The criminal and anti- corruption statutes in existence did not adequately provide for the tracing and confiscation of proceeds of crime from these crimes. There was a therefore a visible gap and due to the increasing international pressures and threats of blacklisting from the United Nations, World Bank and the Financial Action Task Force, Kenya hastily enacted the Proceeds of Crime and Anti- Money Laundering Act. This thesis examines that effectiveness of this Act and there frameworks established under the Act. The thesis argues that, though there was a gap and indeed the efforts to criminalise the crime of money laundering are laudable, the impact and responsibilities created by the Act are slowly crippling some financial sectors designated as reporting institutions under the Act in turn rendering the Act ineffective. The Act introduces onerous and costly compliance requirements which must be complied with failure of which stiff penalties and personal liability may accrue to anyone who fails to demonstrate compliance with the Act, such failure is construed as aiding and abetting the offence of money laundering. The Act is therefore advocating for preventative controls whilst being silent on how to effectively and actively enforce the core objectives of the Act which is to trace and confiscate the proceeds of crime. This thesis therefore highlights the gaps in the Kenya Anti Money Laundering Framework and proposes some salient recommendations that could further enhance the effectiveness of the Act and its regulations. The thesis also conducts a comparative analysis on how Seychelles has implemented the Anti- Money Laundering legal and Institutional frameworks.