The Enforcement aspects of combating money laundering in Kenya

Abstract

Over time the rule of law has been formulated and used to regulate human conduct including discouraging the commission of crime. The purpose of the study is therefore to assess law enforcement aspects of combating money laundering in Kenya. This was done by exploring the regulatory and institutional mechanisms as key enforcement variables. Essentially, it is the mandate of the enforcement agencies to ensure that anti-money laundering (AML) policy is implemented. In spite of this, it still remains difficult to quantify the effectiveness, costs, consequences and challenges of enforcing AML regulations. The study is based on three objectives which are to establish the effects of anti-money laundering legal frameworks, anti-money laundering preventive measures, institutional capacities, and international coordination on combating money laundering in Kenya. To achieve these objectives, the study used descriptive study design and questionnaires to collect data from a sample size of hundred and five (105) employees working in the five purposively identified lead AML enforcement agencies within Nairobi City County. Eighty-eight targeted respondents managed to return filled questionnaires; leading to a response rate was 83.8%. Four institutions dealing with AML combined constituted the sample frame of the study. The study utilized stratified sampling to attain representation from three cadres of employees, that is, the management, supervisory and junior employees. Both descriptive and inferential statistics were used. Equally, Qualitative data was analyzed using content analysis and results presented in themes and prose format. Quantitative data was analyzed using SPSS for both inferential and descriptive statistics, and presented through charts, figures and tables for ease of understanding. The results indicate that the four variables of Money laundering framework, Anti-money laundering preventive measures, Institutional capacity, and international cooperation were associated with a 58.0% positive change in the state of combating money laundering in Kenya. Further, the four independent variables were significant predictors of combating money laundering in Kenya. Changes in money laundering framework (p-value of 0.034), anti-money laundering preventive measures (p-value of 0.014), and institutional capacity (p-value of 0.001) and, international cooperation (p-value of 0.00) were significant predictors of the state of combating money laundering in Kenya. Recommendations were that the government needed to strengthen regulation and enforcement mechanism of combating money laundering in Kenya. Secondly, there is a need to craft a clear coordination framework free of bureaucratic inconveniences to enable harmonious working relationship among the government bodies responsible for the implementation of the AML policy in Kenya. Thirdly, policymakers need to enact a policy that provide for specific incentives that can cheer up FI and the DNFIB to effectively make STRs and SARs as envisaged. Other recommendations are expounded in the study.