Editorials

Back bid to put lawyers on the dirty money watchlist

EDIT

Police officers from Marani police station carry the fake currency they bumped into in Nyatieko ward rep’s home. PHOTO | BENSON MOMANYI | NMG

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Summary

  • In a world where moving cash across borders is just a click away, it behoves any responsible nation to ensure that its financial system is as protected from abuse as much as possible.
  • Looking at Kenya, strong gains have been made in reporting illegal money movement, especially in financial institutions.
  • Recent corruption cases, especially those involving public servants, have exposed the key role played by lawyers in not just hiding, but also deploying the ill-gotten wealth in sectors such as real estate and equities.

A lot of effort has gone into closing the loopholes in Kenya’s fight against money laundering, especially around reporting mechanisms.

In a world where moving cash across borders is just a click away, it behoves any responsible nation to ensure that its financial system is as protected from abuse as much as possible.

Failure to seal loopholes for money laundering can have serious negative effects, including allowing terrorists to move money freely within a financial system and endangering the lives of citizens.

Looking at Kenya, strong gains have been made in reporting illegal money movement, especially in financial institutions. Weak links remain, however, and recent events have exposed lawyers as part of the problem.

Given their crucial position offering legal advice in any deal, lawyers tend to handle a lot of money on behalf of clients.

They will be found mainly in transactions relating to buying and selling property, creation and management of companies, management of bank accounts, trusts and estates on behalf of clients.

For anyone seeking to launder money or avoid scrutiny, the anonymity offered by lawyers—who are not reporting agents to the Financial Reporting Centre (FRC)—is a godsend.

Recent corruption cases, especially those involving public servants, have exposed the key role played by lawyers in not just hiding, but also deploying the ill-gotten wealth in sectors such as real estate and equities.

It is for this reason therefore that MPs must back the renewed bid by the FRC to bring the advocates under the umbrella of those who must report dirty cash deals.

The MPs should therefore back the new amendments to the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill 2021, and ensure that the legal loopholes that doomed the previous attempt at corralling lawyers under the reporting obligations are not repeated.

While lawyers might protest the move, they must appreciate that it does them no favours to be seen as a weak link in cleaning the financial system of abuse by money launderers and corrupt individuals.

Ultimately, it is for the good of the profession that it be seen to promote the rule of law and not as an enabler of shady deals.