AML Compliance and CTF in Kenya

Within the contemporary world’s unstable political and economic landscape, individuals and organisations with evil or hostile intents try to create financial schemes and confusion to destabilise the International Commonwealth further locally or globally.

Therefore, anti-money laundering policy has widely extended beyond personal beneficiation through theft or plunder of political or private money earned and applied illegally. Kenya, together with the other African countries, actively tries to tackle money laundering to stabilise the East African region and help the world to trace terrorist or crime financing. As a result, Kenya has been adopting and developing its AML and CTF policies in cooperation with foreign partners to help tackle and prevent criminal and terrorist organisations from receiving financial aid for their anti-human activity.

1. Money Laundering, FATF, and ESAAMLG

Unfortunately, Kenya is one of the countries where there exist certain levels of terrorism emergence or funding. Therefore, the country has been prudently engaging in international AML institutions and local practices. It is prudent to identify some great notions for the reasons of smoother perception and development of this paper.
Although most people know the term “money laundering,” they lack the awareness of the actual content. “Money laundering” commonly refers to processes when criminals attempt to conceal the existence of the illegal sources or utilisation of incomes while disguising them as legitimate ones. Sadly, the said crime represents an enormous sum of money. The reported financial damage comprises approximately two to five percent of the global GDP, which amounts to $800 billion to $2 trillion every year. To commit the money laundering crime, one has to conduct three steps, but even one is enough for proving the attempted offence; they are placement, layering, and integration. The names are logical about separate illegal actions.
Organizations use diverse methods to launder the money. The most popular one is to illegally receive cash through a business, which inflates the daily revenue constituting the criminal organisations “fronts.” Another way is a smurf. Smurfing implies criminals are breaking up bold cash and deposits it for a durational period into a financial system or several ones. The idea is to conceal the origin of money, but then to make it appear legally owned.
On the international arena, the Financial Action Task Force is responsible for defending, protecting, and preventing money laundering on the criminal organisations and terrorist scales. It is an independent, non-governmental body, established in 1989. The core goal is to aid in creating and promoting levers and plans to protect financial systems around the world against laundering, hazards their integrity and terrorist financing. FATF is rudimental to the protection of financial systems since money laundering is an organised criminal activity, which needs an organisation to battle it, too.
To activate and upkeep the FATF’s provisions, Africa created its organisation –  ESAAMLG. It was designed specifically to implement the FATF recommendations. Attempting to develop itself in all sectors, Kenya actively takes part in ESAAMLG. The latter closely cooperates with the U.S. and the UK to enhance the implementation of the mentioned recommendations and track down criminal organisations.