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The International Monetary Fund (IMF) is tightening the checks to prevent money laundering and wants stronger controls on bank transactions in Kenya
According to a report by an IMF team, Kenya should use financial intelligence tools to increase checks on the risk of money laundering related to corruption in banks and other higher-risk industries.
“Anti-money laundering and counter financing of terrorism supervision should be intensified to mitigate corruption-related money laundering risk in banks and other higher risk sectors and make greater use of financial intelligence,” the IMF team said.
Recently, Kenya has seen an increase in alleged money-laundering operations, leading to the seizure of billions of shillings from businesses and people who were unable to account for their income.
For instance, the State has this year seized from Nigerian citizens and businesses a total of roughly Sh15 billion, most of which is thought to have come via card fraud or remittances made by payment service providers.
The startup company Flutterwave was the target of the largest cash haul from the west African country; according to Kenyan officials, Sh6.2 billion was found in 62 bank accounts as part of money-laundering and card fraud schemes. On the grounds that the money was perhaps used in a money laundering operation, the Asset Recovery Agency also seized over Sh108 million from a woman living in Kiambu County last December.
According to court documents, the agency said that between August and November of last year, Tebby Wambuku Kago and a friend—Felesta Nyamathia Njoroge and a sister Jane Wangui Kago—received Sh260 million from Belgian Marc De Messel through two accounts at Equity Bank. In his declaration paperwork, the Belgian, a bitcoin trader, stated that the funds were a gift.
As per a recent report from the US State Department, warnings were issued due to laxity among the Kenyan officials in the prevention of money laundering, with officials tipping the suspects to move assets before the seizure.
While Kenya’s proximity to Somalia has made it an “attractive destination for funds from unregulated Somali sectors,” the annual International Narcotics Control Strategy Report (INCSR) suggested mobile lending platforms on Safaricom’s M-Pesa system such as Mshwari and KCB-M-Pesa were not strictly regulated.
A team of 19-country Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) will file an evaluation report on the effectiveness of Kenya’s financial systems in September as per expectations. The regional watchdog will track the laws of the country in fighting against terrorist financing and money laundering.