Money laundering a threat to the economy

Criminals will always look for new ways to not only conceal their ill-earned cash, but also always seek to legitimise it so that they can eventually spend it without looking over their shoulders. Because of the big amounts of money involved in crime, cartels have crafted new and sophisticated ways of ‘washing’ their money, turning the process into intricate international money laundering networks.

Kenya has not been spared as a destination, and conduit for dirty money.

The country must exercise eternal vigilance because international crooks are always looking for countries with weak legislations or poor enforcement so that they can send their dirty money to be laundered and routed back to them as clean money. These crooks look for high cash turnover businesses to conceal their loot.

If left unchecked, this trend often leads to the escalation of crime and legitimisation of the underworld. When money is cleaned this way, it is re-injected for use in vices such as drug trafficking, illegal sex, human trafficking, fraud, and tax evasion.

It is estimated that upto Sh162 trillion is laundered annually even with the stringent measures countries are taking in the wake of international terrorism networks.

Because dirty money has the capacity of undermining a country’s entire financial system, most countries have introduced laws to check the vice. This is what led to the enactment of the Proceeds of Crime and Anti-money Laundering Act 2009.

Although the enactment of this law was hailed as a breakthrough in efforts to lockout illegally earned money, there is nothing to show that the vice is on the decline. It is shocking that money laundering could actually be on the rise, as these criminals are still sending in dirty money concealed in dubious business transactions thanks to deep-rooted corruption.

The two things that contribute greatly to Kenya becoming an attractive destination for money laundering are corruption and drug trafficking. It is unfortunate that quite apart from our country scoring poorly in the fight against corruption, it is also ranked as a conduit for narcotic drugs to Europe.

As our investigations show, these crooks seeking to wash their dirty money no longer wire huge amounts of money into a bank account as they used to. They have perfected the art of evading law enforcers; they send money across borders under the guise of legitimate business.

These crooks have been able to conduct their illegitimate dealings right under the noses of customs officers, police officers, lawyers, and clearing and forwarding agents.

It is high time that both law enforcers and other professionals who have been roped into this vice to realise that money laundering, like drug trafficking, may help line the pockets of a few people, but its social and economic effects are corrosive and a danger to the formal economy. The Police Department must come out clean on this one. We have asked before this question: Is it too hard for the police to find out who are the barons who plan for the entry and transit of hard drugs?

How come that even when huge consignments of drugs are netted, it is only the small fish that the police net catches? Don’t the police bosses know that many a times junior police officers have intercepted consignments of drugs but ordered by the superiors to release the drugs?

What about money laundering? How does the anti-banking fraud team respond to reports of suspicious cash when they are told it belongs to an influential person?

These are the hard questions that we must ask ourselves to effectively fight money laundering.

For this vice to be fought effectively, there must be concerted efforts among the police, customs officers, the anti-banking fraud unit, the Kenyan Anti-Corruption Commission, and the Judiciary.

Kenya must also be ready to seek and share information with other countries that are committed to the fight against this vice because money-laundering crooks have embraced the conveniences of a globalised economy faster than governments.