US queries delays in law to fight crime

The US has questioned the delay in setting a commencement date for an anti-money laundering law passed by Parliament last year.

The legislation is said to be crucial in the war against piracy, drug trafficking and terrorism in the country.

According to the latest US State Department International Narcotics Control Strategy report on money laundering and financial crimes, although Parliament passed the Proceeds of Crime and Anti-Money Laundering Act, which was subsequently signed by the President, no commencement date has been set by the Finance minister.

The anti-money laundering law introduces measures providing for the identification, tracing, freezing, seizure and confiscation of proceeds of crime.

The new law requires financial institutions, other businesses and professions, including casinos, real estate agencies, precious metal and stone dealers, and accountants, to file reports on suspicious transactions.

Section 45 of the new law requires institutions to monitor all transactions, pay attention to any unusual patterns and report those that are suspicious.

Under the anti-money laundering law, the institutions must file reports of all cash transactions exceeding the equivalent of $10,000 or Sh700,000 in any currency.

The law defines proceeds of crime as any property or economic advantage derived or realised, directly or indirectly, as a result of or in connection with an offence.

The legislation provides for criminal and civil restraint, seizure and forfeiture. In addition, the new law authorises the establishment of a Financial Intelligence Unit, which is crucial in tracing proceeds of crime.

Take advantage

The US report says lack of an anti-money laundering law in Kenya has turned it into a haven for international drug traffickers, terrorists and pirates, who take advantage of the current situation to launder billions of shillings through the country.

It says money laundering from piracy along the Somali coast and drug trafficking had increased tremendously.

Kenya’s financial system is estimated to be laundering $100 million or more than Sh7 billion annually, according to the report.