Banks in Kenya and anti-money laundering obligations: the conflicts of interests arising

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Constance Gikonyo
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Relevant Literature ◽  
Case Law ◽  
Conflicts Of Interests ◽  
Content Type ◽  
Contractual Relationship ◽  
Proceeds Of Crime ◽  
The Law ◽  
Scholarly Contribution

Purpose Kenya is vulnerable to trade-based and other forms of money laundering. Banks are prime targets for money launderers since they can facilitate the processes of placement, layering and re-integration. Consequently, banks are key in fulfilment of the prohibitory and preventative anti-money laundering (AML) strategies. In executing these obligations, the potential for clashes between the bank following the law and obeying its contractual duties to the client arises. Hence, this paper aims to examine these potential conflicts of interests. Design/methodology/approach The examination is based on reviewing relevant literature, case law and analysing the Proceeds of Crime and AML Act and its attendant regulations. These form the core of the AML regime imposing obligations on banks. Findings The analysis indicates the provisions are robust and can assist in addressing money laundering risks faced by banks. Nonetheless, there are identified gaps since the primary AML legislation does not provide guidance on various issues. This can potentially lead to banks facing litigation from customers for failure to honour its duty of secrecy and customer’s instructions. Originality/value The paper seeks to make a practical and scholarly contribution in considering the issue and possibly filling this gap through advocating for statutory amendment. Subsequently, positive review of the law will help strike a balance between interference in the banker-customer contractual relationship and facilitation of banks fulfilling their prohibitory and enforcement of AML obligations.

The legal profession in Kenya and its anti-money laundering obligations or lack thereof

2019 ◽  
Vol 22 (2) ◽  
pp. 247-256 ◽  
Author(s):  
Constance Gikonyo
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Relevant Literature ◽  
Legal Obligation ◽  
Policy Changes ◽  
Content Type ◽  
Legal Professionals ◽  
Gate Keeping ◽  
Proceeds Of Crime ◽  
Scholarly Contribution

Purpose The purpose of this paper is to examine the inclusion of lawyers in Kenya’s anti-money laundering regime and the role they can play towards assisting in detection and gate-keeping of potential money laundering activities. Kenya is a transit point for trade-based money laundering. Accordingly, it is vulnerable to money laundering that can be facilitated by legal professionals, through their misuse by criminals. These professionals can be both enablers and perpetrators. Design/methodology/approach The study is secondary in nature. It is based on reviewing relevant literature and analysing the Proceeds of Crime and Anti-Money Laundering Act and the Proceeds of Crime and Anti-Money Laundering Regulations. The legislation and the rules form the core of Kenya’s anti-money laundering regime. Findings The omission of legal professionals from Kenya’s anti-money laundering regime constitutes a big gap under its preventative mechanisms. Further, it makes them attractive to criminals because they are under no legal obligation to report potential money laundering activities. Ultimately, the inclusion of lawyers as DNFBPs is necessary. This would seal the extant regulatory gap and ensure enhanced awareness amongst the legal professionals of the money laundering risks that they face. Originality/value Given Kenya’s money laundering susceptibility, it is necessary and prudent to critically consider the inclusion of legal professionals in its anti-money laundering mechanisms. The paper seeks to make a practical and scholarly contribution in considering the issue and possibly trigger further discussions, as well as the necessary legislative and policy changes. This would positively enhance the success of Kenya’s anti-money laundering regime in detecting money laundering activities.

Detection mechanisms under Kenya’s anti-money laundering regime: omissions and loopholes

2018 ◽  
Vol 21 (1) ◽  
pp. 59-70 ◽  
Author(s):  
Constance Gikonyo
Keyword(s):  
Money Laundering ◽  
Relevant Literature ◽  
Policy Changes ◽  
Content Type ◽  
Implementation Challenges ◽  
Legal Professionals ◽  
Proceeds Of Crime ◽  
Scholarly Contribution ◽  
Drug Traffickers ◽  
Detection Mechanisms

Purpose This paper aims to detect the methods that facilitate the identification of potential money laundering activities in Kenya. Kenya is a transit point for international drug traffickers and trade-based money laundering. Hence, it is vulnerable to money laundering and consequently, it is necessary to examine the potency of its first lines of defence and its weaknesses. Design/methodology/approach The research is secondary in nature. It is based on reviewing relevant literature and analyzing the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) and the Proceeds of Crime and Anti-Money Laundering Regulations (POCAMLR). Both form the core of Kenya’s anti-money laundering regime. Findings Generally, the identified methods can facilitate identification of proceeds of crime and possible laundering activity. However, there are challenges in the provisions that could reduce effectiveness. These include intrinsic loopholes and implementation challenges, in the provisions relating to accountants, precious stone and metal dealers and the hawala system. Additionally, there is the key omission of car dealers and legal professionals from the mechanisms for detecting money laundering. Originality/value Given Kenya’s money laundering susceptibility, it is necessary and prudent to critically examine its mechanisms for detecting money laundering. The paper seeks to make a practical and scholarly contribution in filling this extant gap. This paper can trigger further discussions as well as the necessary legislative and policy changes. This would positively enhance the success of Kenya’s anti-money laundering regime in detecting money laundering activities.

New developments in Hong Kong’s anti-money laundering laws

2016 ◽  
Vol 19 (3) ◽  
pp. 291-297 ◽  
Author(s):  
David Kwok
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Task Force ◽  
Case Law ◽  
New Developments ◽  
Content Type ◽  
Proceeds Of Crime ◽  
Financial Action Task ◽  
Law And Legislation

Purpose The purpose of this paper is to discuss briefly new developments in Hong Kong’s (HK) Anti-Money Laundering (AML) laws, both in terms of case law and legislation. Design/methodology/approach In terms of case law, the author discusses two decisions given by HK’s Court of Final Appeal relating to the dealing of proceeds of crime offence. Also, a guideline case on sentencing is also examined. In terms of legislation, the author briefly outlines the main provisions of the newly enacted AML and Counter-Terrorist Financing (Financial Institutions) Ordinance. Findings As suggested by the Financial Action Task Force, new measures need to be put in place. The AML laws, as they presently stand, need further improvement. Originality/value A good AML regime is necessary as HK continues to thrive as a major financial/banking centre in Asia. This paper seeks to encourage more discussion on the topic.

Money laundering control in Tanzania

2019 ◽  
Vol 22 (4) ◽  
pp. 796-835
Author(s):  
Eugene E. Mniwasa
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Case Law ◽  
Legal Framework ◽  
Law And Literature ◽  
Policy Documents ◽  
Content Type ◽  
Enabling Environment ◽  
Banking Institutions ◽  
Political Economic

Purpose This paper aims to examine how banks in Tanzania have been vulnerable to money laundering activities and how the banking institutions have been implicated in enabling or aiding the commission of money laundering offences, and highlights the banks’ failure or inability to prevent, detect and thwart money laundering committed through their financial systems. Design/methodology/approach The paper explores Tanzania’s anti-money laundering law and analyzes non-law factors that make the banks exposed to money laundering activities. It looks at law-related, political and economic circumstances that impinge on the banks’ efficacy to tackle money laundering offences committed through their systems. The data are sourced from policy documents, statutes, case law and literature from Tanzania and other jurisdictions. Findings Both law-related and non-law factors create an enabling environment for the commission of money laundering offences, and this exposes banks in Tanzania to money laundering activities. Some banks have been implicated in enabling or aiding money laundering offences. These banks have abdicated their obligations to fight against money laundering. This is attributed to the fact that the banks’ internal anti-money laundering policies, regulations and procedures are inefficient, and Tanzania’s legal framework is generally ineffective to tackle money laundering offences. Originality/value This paper uncovers a multi-faceted nature of money laundering affecting banks in Tanzania. It is recommended that Tanzania’s anti-money laundering policy should address law-related, political, economic and other factors that create an enabling environment for the commission of money laundering offences. Tanzania’s anti-money laundering law should be reformed to enhance its efficacy and, lastly, banks should reinforce their internal anti-money laundering policies and regulations and policies.

Beyond placement, layering and integration – the perception of trade-based money laundering risk in UK financial services

2019 ◽  
Vol 22 (4) ◽  
pp. 614-625 ◽  
Author(s):  
Mario Menz
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Design Methodology ◽  
Banking Sector ◽  
Trade Finance ◽  
Content Type ◽  
Proceeds Of Crime ◽  
The Uk ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this study was to investigate the perception of trade-based money laundering in Letters of Credit (“L/C”) transactions among trade finance practitioners in the UK banking sector and to compare it to the perception of the same risk by the Financial Conduct Authority (“FCA”), the regulator of the UK’s banking sector. Design/methodology A survey was used to carry out research among financial services professionals engaged in trade finance in the UK. Findings This paper contributes to the existing literature in a number of ways. First, it investigates the perception of trade-based money laundering risk from the perspective of financial services professionals, which has not previously been done. Second, it argues that the perception of trade-based money laundering in financial services is overly focussed on placement, layering and integration, and that the full extent of the offence under the Proceeds of Crime Act 2002 is less well known. It further found that financial services firms need to improve their understanding of the nature of trade-based money laundering under UK law. Practical implications This study argues that the financial services sector’s perception of trade-based money laundering risk in trade finance is underdeveloped and makes suggestions on how to improve it. Originality/value It provided unique insight into the perception of trade-based money laundering risk among financial services professionals.

“Captured by evils” – combating black money, corruption and money laundering in Bangladesh

2018 ◽  
Vol 21 (3) ◽  
pp. 264-289 ◽  
Author(s):  
S.M. Solaiman
Keyword(s):  
Money Laundering ◽  
National Economy ◽  
Subject Matter ◽  
Design Methodology ◽  
Social Implications ◽  
Original Research ◽  
Content Type ◽  
The Law ◽  
Practical Implications ◽  
Secondary Materials

Purpose The purpose of this paper is to demonstrate that the recurrent amnesties to black money holders (BMHs) in Bangladesh have not benefited the national economy, rather have increased corruption and money laundering, and that offering further opportunity to whiten back money as recommended by the Anti-Corruption Commission of Bangladesh will do more harm than good. Design/methodology/approach This research relies on both primary and secondary materials adopting an archival analysis of the existing literature. Findings The major findings include the following: the recurrent amnesties to BMHs have damaging impacts on corruption and money laundering in Bangladesh; the Anti-Corruption Commission of Bangladesh’s recommendation to provide further opportunity to legalise black money is flawed, ill thought-out and misjudgement of the futility of the amnesties offered to date; and the black money problem could be better addressed through using educational, preventive and punitive measures that have been specifically formulated in this paper. Research limitations/implications This research does not examine the flaws that may remain in the provisions of existing laws; rather it gives emphasis to the enforcement of the law in place. Legal flaws thus can be a subject matter of another endeavour. Practical implications As implications, it is expected that this research will encourage the concerned authorities in Bangladesh to stop offering amnesties to BMHs for good. Also, other countries facing a similar problem can learn from the experience of Bangladesh presented, and specific recommendations submitted, in this paper, in dealing with black money, corruption and money laundering. Social implications It is expected that if the recommendations furnished in this paper are implemented, corruption in, and money laundering from, Bangladesh will reduce. This reduction will facilitate ensuring fairness in the society in many respects, deter criminal activities associated with black money and enable honest taxpayers to buy their homes in a level-playing filed. Originality/value This paper presents original research in terms of analysis of materials and the recommendations submitted to deal with corruption, black money and money laundering.

scholarly journals Compensation for harm caused by nuclear installations: what’s the damage?

2018 ◽  
Vol 10 (1) ◽  
pp. 17-35
Author(s):  
Robert Lee ◽  
Radek Stech
Keyword(s):  
Design Methodology ◽  
Case Law ◽  
Personal Injury ◽  
Eu Law ◽  
Legal Research ◽  
Property Damage ◽  
Content Type ◽  
The Law ◽  
The Impact

Purpose This paper aims to explain the changes to the liability regime for nuclear installations before reviewing the traditional heads of damage under the 1965 Act. It argues that while there is some welcome clarification of what amounts to an “occurrence” in the purposes of the 1965 Act, disappointingly, little has been done to clarify how concepts of personal injury and property damage under the Act sit alongside traditional tort notions leaving the law highly dependent on earlier, but not always consistent, case law. The paper then goes on to consider the impact of the new categories of compensation, introduced by the Order, evaluating the extent to which these draw upon EU law structures for environmental impairment liability. Again, it questions whether this approach will achieve sufficient clarity and certainty. Design/methodology/approach This paper is a desk-based legal research. Findings This study is a discussion of statutory material and case law. Originality/value This paper is a first in-depth treatment of changes to liability principles in the Nuclear Installations Act 1965.

The financial intelligence unit and money laundering control in Tanzania

2019 ◽  
Vol 22 (3) ◽  
pp. 543-562
Author(s):  
Eugene E. Mniwasa
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Research Approach ◽  
Institutional Reforms ◽  
Content Type ◽  
Essential Component ◽  
The Law ◽  
Financial Intelligence ◽  
Practical Implications

Purpose This paper aims to explore the role of the financial intelligence unit in Tanzania in fighting against money laundering and its predicate offences, examine its potential in controlling the problem and describe factors that undermine its efficacy. Design/methodology/approach The doctrinal research approach is used to analyse Tanzania’s anti-money laundering law and appraise its effectiveness in facilitating operations of the financial intelligence unit in fighting against money laundering and its predicate offences. The law-in-context approach is applied to interrogate the anti-money laundering law and describe non-law factors that impinge on the efficiency of Tanzania’s financial intelligence unit. Findings The law vests the financial intelligence unit with powers to perform a number of functions that are significant in fighting against money laundering and its predicate offences in Tanzania. The unit has been instrumental in curbing money laundering. The efficacy of this anti-money laundering agency, which is at its infancy stage, is emasculated by law-related, institutional and non-law factors. These factors undercut the potency of the agency. Practical implications There is a need for Tanzania to undertake policy, legislative and institutional reforms to augment the efficacy of the financial intelligence unit. The reforms should be implemented concurrently with other measures, which will enhance the country’s anti-money money laundering regime. Originality/value This paper applies the legal and non-law perspectives to evaluate the effectiveness of the financial intelligence unit as an essential component of Tanzania’s anti-money laundering regime. It proposes law-related and non-law approaches to augment the efficiency of the unit and the country’s anti-money laundering regime in general.

Forfeiture of criminal proceeds under anti-money laundering laws

2018 ◽  
Vol 21 (1) ◽  
pp. 104-111 ◽  
Author(s):  
Anusha Aurasu ◽  
Aspalella Abdul Rahman
Keyword(s):  
Comparative Analysis ◽  
Money Laundering ◽  
Design Methodology ◽  
Policy Makers ◽  
Content Type ◽  
Standard Of Proof ◽  
Terrorism Financing ◽  
Efficient Regime ◽  
Proceeds Of Crime ◽  
Similarities And Differences

Purpose Money laundering has been a focal problem worldwide. Governments constantly come up with initiatives to fight against this offence. To clean proceeds of corruption, the laundering of money is utilised, as it transforms “dirty” money into “clean” ones. A comparative analysis between Malaysia’s Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLATFPUAA) and United Kingdom’s Proceeds of Crime Act (POCA) is performed on the basis of the similarities and differences of both legislations, in terms of forfeiture provisions. The purpose of this paper is to investigate whether the current forfeiture regime in both jurisdictions is effective in fighting against money laundering. Design/methodology/approach This paper is based on a doctrinal research where reliance will mainly be on relevant case laws and legislations. AMLATFPUAA and POCA are key legislations which will be utilised for the purpose of analysis. Findings Strengths and weaknesses of both AMLATFPUAA and POCA are identified through a comparative analysis where findings show that POCA is more comprehensive than AMLATFPUAA in terms of offences covered by it and standard of proof. With that, the anti-money laundering (AML) laws can further be improvised by being a better and efficient regime where Malaysia and United Kingdom will be able to discharge their duties effectively on forfeiting benefits from criminals. Originality/value This paper offers some guiding principles for academics, banks, their legal advisers, practitioners and policy makers, not only in Malaysia but also elsewhere.

scholarly journals Liability of employers for third party harassment in the UK

2020 ◽  
Vol 63 (1) ◽  
pp. 147-156
Author(s):  
Sam Middlemiss
Keyword(s):  
Trade Unions ◽  
Design Methodology ◽  
Research Study ◽  
Case Law ◽  
Third Party ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
Practical Implications

Purpose This paper aims to summarise current law dealing with third party harassment in workplaces in the UK and make recommendations for improving law. Design/methodology/approach Review of case law, articles etc. Findings It is found that the current law is inadequate and unclear, and in dire need of reform. Research limitations/implications This research study will be useful for trade unions and employers and employees and workers. Practical implications This study supports the cause of reform of the law. Originality/value To the best of the author’s knowledge, this study is an original piece of work.

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