Financial Crime World

Kenyan Courts Battle Unexplained Wealth in Financial Crimes Cases

In a country known for corruption, financial crimes continue to pose a significant challenge to Kenya’s economic growth and development. According to a recent survey by Xpress Money, 58% of respondents reported experiencing some form of economic crime within the last 24 months—despite a decrease from the 75% reported in 2018. The number of economic crimes reported to the police also increased to 4,786 in 2019, marking the highest number since 2010.

Fighting Financial Crimes in Kenya: Progress and Challenges

Progress has been made in the fight against financial crimes in Kenya. The Ethics and Anti-Corruption Commission Act (EACCA) of 2011 and its predecessor, the Anti-Corruption and Economic Crimes Act (ACECA), have led to several high-profile cases with successful outcomes since the ACECA was first applied in 2008. Three major cases have seen a 100% success rate, with an estimated USD 6.4 million in funds recovered in total.

Despite these achievements, the legal framework continues to face challenges, particularly in the area of unexplained wealth recovery proceedings. In the case of Stanley Mombo Amuti v KACC, the constitutionality of the provision for unexplained wealth forfeiture was called into question. The High Court found the provision to be inconsistent with the Kenyan Constitution, but the decision was later overturned at the Court of Appeal, raising concerns about the violation of constitutional rights to a fair trial and presumption of innocence.

More recently, in the case of EACC v Patrick Ochieno Abachi & 6 ors, the Ethics and Anti-Corruption Commission successfully challenged the respondent to explain the source of his assets, leading to the confiscation of several bank accounts, properties, and plots of land. Abachi appealed the decision, but the stay of execution was later quashed.

A History of Financial Corruption in Kenya: The Goldenberg Scandal

Despite these achievements, Kenya’s fight against financial corruption has faced significant blows. The Goldenberg Scandal, a political scandal dating back to the 1990s, saw high-level government officials embezzle 10% of the country’s annual Gross Domestic Product through subsidized exports of gold. Several officials were prosecuted, but the ruling by the constitutional court that one party “cannot be charged” promoted injustice and rendered the law ineffective.

Hope for the Future

Despite these challenges, Kenya’s institutions are persisting in their efforts to combat financial crimes. In May 2021, the Ethics and Anti-Corruption Commission linked three governors and a sitting County Boss to Sh 11Billion in unexplained wealth. As the legal framework continues to evolve and investigators become more skilled in obtaining evidence of civil illicit enrichment, hope remains that justice will prevail in Kenya’s fight against financial crimes.

Key Insights from Scholars

  • Ayodeji G.I, Olola James. O, Mochere, Shalline Nyaboke, Vinya, M. Victor, Mungai, and Moses Kahiga, among others, have contributed valuable insights into financial and economic crimes, wealth declaration, unexplained wealth, and comparative studies in Kenya.
  • Their work serves as a crucial resource in understanding the complex legal landscape of financial crimes in Kenya.

Conclusion

With several high-profile cases ongoing and the judiciary and law enforcement continuing to adapt to the changing legal landscape, Kenyans remain hopeful for progress in the fight against financial crimes. Judges, prosecutors, and investigators are working to increase the speed and effectiveness of resolution, as well as developing new skills to uncover civil illicit enrichment. The future of financial crimes in Kenya looks uncertain, with both challenges and opportunities on the horizon.