Kenyas banking and real estate sectors have become prime targets for illicit finances as gaps in the implementation of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) law have created a fertile ground for money laundering.
According to the latest report by The Sentry watchdog dated October 2021, weaknesses in Kenyas finance and real estate sectors have been exploited to finance South Sudans conflict, with arms and ammunitions also transiting through Kenya into the country.
The report titled Kenya Illicit Finance Risks and Assessment notes that Kenya is a destination for illicit South Sudanese funds and that South Sudanese politically exposed persons (PEPs) responsible for the conflict have infiltrated Kenyas banking, real estate, trade, defence and corporate enterprises.
Some Kenyan corporate structures were beneficiaries of the $922 million South Sudanese letters of credit scandal, in which oil-backed loans were used to secure financing to import food and goods from neighbouring countries, the report says.
It reveals that Kenyans, including members of the political elite, have set up businesses with corrupt foreign PEPs, making it easy to move illicit funds.
The Sentry is an investigative and policy team that follows dirty money connected to African war criminals and war profiteers and seeks to shut them out of the international financial system.
According to this latest report Kenya faces numerous illicit finance risks that include domestic corruption, terrorist financing, environmental crimes, tax evasion and the misuse of digital finance such as mobile banking and cryptocurrency.
If Kenya has the political will, it has the ability to respond to existing threats, but tech-enabled and cyber risks require additional training and technology resources, the report says.
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