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Casinos, cars targeted in war on dirty money

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Casinos, cars targeted in war on dirty money

A high-powered anti-money laundering task force
A high-powered anti-money laundering task force has been formed to establish the extent of money laundering in the three sectors, setting the stage for a crackdown on the suspects. FILE PHOTO | NMG 

Casinos, land and luxury vehicle transactions are set to come under close scrutiny as the State moves to close loopholes that criminals and corruption cartels use to launder illicit cash.

A high-powered anti-money laundering task force has been formed to establish the extent of money laundering in the three sectors, setting the stage for a crackdown on the suspects.

The team gazetted on Friday by Treasury Secretary Henry Rotich brings together 30 State agencies from the security apparatus, the Judiciary, as well as banks, Saccos, real estate and gaming regulators.

The taskforce will be chaired by the Treasury while its activities will be co-ordinated by the Financial Reporting Centre (FRC), the State’s anti-money laundering watchdog.

It is expected to craft Kenya’s first ever national strategy on combating money laundering and terrorism financing by March 31 next year.

“Kenya has never done a risk assessment (on money laundering). Once we do a risk assessment we are able then to put more resources in the areas where the highest risk would be identified,” said Assets Recovery Agency (ARA) director Muthoni Kimani. “We know (the risk areas), but we have to document them.”

ARA is one of the agencies that will form the anti-money laundering taskforce.

The Betting Control and Licensing Board (BCLB) director, Liti Wambua, welcomed the inclusion of the betting regulator into the taskforce, saying the agency supported enhanced measures to ensure the betting industry was not used as a conduit for money laundering.

“Betting operators file annual reports to the Financial Reporting Centre. We are ready for enhanced measures that ensure the industry remains clean,” Mr Wambua said on phone.

Vehicle dealers, real estate developers and law firms have for long been cited as the conduits used for laundering dirty cash into the economy.

Shrewd traders have also resulted to going round financial systems such as banks when laundering proceeds of crime and corruption after most loopholes were sealed through tighter know-your-customer rules.

In January, the CEO of the Financial Reporting Centre, Saitoti Maika, said that it is not financial institutions that are used to abet corruption.

“Proceeds of corruption are not necessarily going into financial institutions,” Mr Maika said.

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“We are looking at… areas of real estate and second-hand motor vehicles where people are able to trade in cash basis. The issue of being able to buy a second-hand vehicle in cash and that sector is not regulated, we are also addressing that.”

Five banks found complicit in facilitating dubious National Youth Services (NYS) transactions were fined a cumulative Sh393 million by the CBK late last year.

“It’s for the benefit of the country so that those who are getting money from the wrong channels are not free to do anything they want. There has to be some form of controls and traceability,” said the Secretary-General of Kenya Auto Bazaar Association, Mr Charles Munyori.

Other sectors targeted for risk assessment by the taskforce include forex bureaus, money remittance outlets, fund managers, hotels and restaurants as well as mineral dealers.

“The (taskforce will) identify the threat posed by money laundering and terrorist financing to the country; collect, input and analyse data to facilitate identification of the risks, threats and vulnerabilities on money laundering and terrorism financing (and) determine the vulnerability of financial institutions and designated non-financial businesses and professions,” said Mr Rotich in the gazette notice dated March 22.

Members of the taskforce will include representatives from the Central Bank of Kenya (CBK), the Anti-Narcotics Unit (ANU), Anti-Terrorism Police Unit (ATPU), Asset Recovery Agency (ARA), Banking Fraud Investigations Departmental Unit (BFID) and the Betting and Licensing Control Board (BCLB).

Others are the Capital Markets Authority (CMA), the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC), the Kenya Bankers Association (KBA), Kenya Revenue Authority (KRA) and the Ministry of Interior and Co-ordination of National Government.

The Attorney-General, the Director of Public Prosecutions (DPP), National Counter Terrorism Centre, National Intelligence Service (NIS), National Police Service (NPS) and State Department of Immigration are among other agencies to be involved.

“The taskforce (will) identify and assess the level and trends of money laundering and terrorist financing risk in the country,” said Mr Rotich.

However, not everyone welcomed the formation of the taskforce.

“Such bodies being set up for purposes of public posturing will not go anywhere; but set them up as genuine roundtables with a clear mandate to exchange best practice and the nation will benefit,” said Deepak Dave, a Nairobi-based risk management expert.

Recently, a joint report by the African Union (AU) and the United Nations Economic Commission for Africa (UNECA) unveiled in September 2016, showed that the Kenyan economy is haemorrhaging billions of shillings annually in illicit financial outflows, crucial resources which experts say could be used to invest in struggling sectors such as healthcare, education and infrastructure.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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