BACKGROUND
The United States of America state department in 2014 categorised Kenya as safe haven for money laundering in Africa. The actual words were: “Kenya is categorised as a Jurisdiction/ country of primary concern in respect of money laundering and financial crimes1.” Despite Parliament having enacted the Proceeds of Crime and Anti-Money Laundering Act No. 9 of 2009 (POCAMLA)2, the same appeared to have had little effect on its intended objectives.
In recent times, however, the courts seem to have injected life into the Act by its decisions in the recovery of property and monies considered proceeds of crime.
What Constitutes Proceeds of Crime?
There has been a broad definition of what really constitutes proceeds of crime. However, the Act at section 2 defines proceeds of crime as follows; “……any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed.3″
In a nut shell, despite the definition being wide, the Act stipulates that any property or economic progress realized in a direct or indirect manner regardless of the identity of the offender including property that is directly linked to the offence or property that is acquired as a result of the offence. In an event of successful conversion to legitimate business, it still forms part of proceeds of crime.
For instance, if person A is engaged in criminal activities, that is, drug trafficking or racketeering and he uses the monies obtained from the illegaltrade to buy houses, motor vehicles or any other assets and puts them up forrental or start a legitimate business, the entire of the business will form part ofproceeds of crime.
The reason for such a wide definition of what really constitutes proceeds of crimes was as defined in the Schabir Shaik & Others –vs- State Case CCT 86/06(2008) ZACC 7 cited with authority by Hedwig L. Ong’udi L.J in The Assets Recovery Agency v Quorandum Limited & 2 others [2018] eKLR which states that;
“…One of the reasons for the wide ambit of the definition of “proceeds of crime” is, as the Supreme Court of Appeal noted, that sophisticated criminals will seek to avoid proceeds being confiscated by creating complex systems of ‘camouflage’ The Supreme Court of Appeal held that a person who has benefited through the enrichment of a company as a result of a crime in which that person has an interest will have indirectly benefited from that crime.4”