Kenya ‘a regional hub for ill-gotten gains’

Kenya is among countries where major money laundering is prevalent, mainly from proceeds of piracy and other crimes.

A US Government 2010 report says Kenya launders more than $100 million (Sh8.3 billion) a year.

Besides piracy-related funds, corruption, smuggling, drug trafficking, and casinos help to clean up money.

The US and UK are on the list too, but this is attributed to their huge economies where financial institutions are accustomed to large transactions.

Kenya it susceptible to the illegal deals as it is the financial and trade centre of Eastern, Central, and Southern Africa.

The findings in the “International Narcotics Control Strategy Report – Money Laundering and Financial Crimes” were initially revealed in 2009 but the current report shows the crimes continued unabated.

“There is also insufficient political will to address these crimes. The Kenya Government did not report any money laundering or terrorist financing arrests, prosecutions, or convictions from 2007 through 2010,” reads part of the report.

The Proceeds of Crime and Anti-Money Laundering Act came to force in June 2010. But the US says this law has not been used against anybody.

“Kenya has no straightforward legal mechanism to freeze or seize criminal or terrorist accounts.”

Other African countries listed in the report include Somalia, Nigeria, Guinea-Bissau and Zimbabwe.

The report further talks of a rife black market for smuggled goods in Kenya, which serves as a transit for Uganda, Tanzania, Rwanda, Burundi, northern Democratic Republic of Congo, and Southern Sudan.

Money laundering in Kenya is further complicated by unregulated informal networks of the Somali hawala cash remittance system.