Kenya’s War on Money Laundering: A Lackluster Effort with No Convictions

Despite efforts to combat money laundering (ML) in Kenya, the country has failed to secure a single conviction in the past year. This lack of success is attributed to authorities’ inability to categorize and track different types of ML cases.

Challenges in Categorizing Money Laundering Cases

The Mutual Evaluation Report of Kenya, released in September 2022, reveals that authorities do not differentiate between various forms of ML, making it challenging to assess which type is most prevalent and how to effectively mitigate it. This lack of distinction is further compounded by the discrepancy between the national risk profile presented in the National Risk Assessment (NRA) report and the records and statistics provided by the authorities.

Misaligned Risk Profile and Records

According to the report, the NRA presents fraud, forgery, and drug-related offenses as posing the highest threat, whereas the records show that most proceeds identified, investigated, and prosecuted come from corruption and theft of public funds and property. The lack of ML cases involving foreign predicate offenses is particularly surprising given Kenya’s geopolitical situation and economic profile in the Eastern Africa region.

No Convictions or Sanctions

During the review period, there were no ML convictions, which means no sanctions were imposed on any legal or natural person. As a result, it is impossible to assess whether Kenya issues effective, proportionate, and dissuasive sanctions for ML conviction.

Confiscation Efforts Fall Short

Kenya has pursued confiscation of criminal proceeds and instrumentalities of crime but has not attempted to seize property of equivalent value. The country has recorded some success in pursuing proceeds of domestic predicate offenses, but there is no record of pursuing or recovering proceeds of foreign predicate offenses.

Disparity Between Risk Profile and Confiscation Results

The report highlights the disparity between the reported risk profile of the country and the actual confiscation results. According to the NRA report, drug trafficking offenses and forgery and fraud are presented as posing the biggest ML threat, while most recoveries made or the highest value of recoveries made come from cases of corruption and theft of public funds and property.

Terrorist Financing: A Lack of Progress

Kenya conducts TF investigations alongside terrorism-related investigations but has limited case studies and statistics to demonstrate a range of TF activity is pursued. The country has not demonstrated a broader range of investigations into different terrorist groups operating in Kenya or neighboring countries. TF investigations are not integrated into broader counter-terrorism strategies, and agencies do not share information effectively.

Conclusion

The lack of progress in combating ML and TF highlights the need for Kenya’s authorities to re-evaluate their approach and improve cooperation among agencies to effectively combat these threats.