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{
    "id": 1278847,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1278847/?format=api",
    "text_counter": 248,
    "type": "speech",
    "speaker_name": "Tigania West, UDA",
    "speaker_title": "Hon. (Dr) John K. Mutunga",
    "speaker": null,
    "content": "not leave any loopholes for terrorism financing. Hopefully, the legislation will also reduce our country’s vulnerability to money laundering given that Kenya is a cash economy. Which problems exist with money laundering? I looked at the existing legislation and picked out a few issues. One of them is the inability to comprehensively deal with related issues, especially those happening in our neighbouring countries. Kenya cannot live as an island. It relates with other countries. Therefore, whatever happens in those countries affects our country. It can also delay the implementation of the Act itself. It took quite some time for us to interpret this Act and put in place mechanisms to implement it. Hon. Temporary Speaker, the other issue is difficulty in monitoring movement of people, especially terrorists. Looking at the law being amended, the penalties are not punitive enough. There is also lack of proper linkages between money laundering and terrorism. As we speak about money laundering, we have experience with other cash-economy countries. I have in mind a city I have visited several times called Guangzhou in China, where you need cash to buy anything. They do not deal with cards or bank transfers. You need hard cash. That makes me pause and ask a few questions about this particular legislation. Does dealing with cash frustrate legitimate businesses? Are we saying that between 80 per cent and 100 per cent of businesses in Guangzhou are illegitimate because they deal in cash? Does dealing in cash in such a large city like Guangzhou necessarily end up corrupting the financial systems of that country? We are considering a Bill that seeks to introduce restrictions which must be thought through very carefully. Does it also end up corrupting the social-political system of the country because dealing with money leads to corruption? Does it also diminish the Government’s responsibility to collect revenue through taxation? Does it weaken the Government’s control over the economy? Is our economy going to be messed up by the presence of cash? If our economy is going to be messed up by the presence of cash in the market, what effect will that have on other countries that insist on using cash? Does it also lead to undermining the integrity of the financial systems within a country? I hope this legislation proposal has answered the question of whether dealing with cash threatens the integrity and stability of the banking sector and foreign exchange bureaus. Lastly, why does money laundering happen in this country? That is a question we need to answer so that Kenyans can understand why we need to come up with a very serious legislation on this matter. Hon. Temporary Speaker, one of the reasons why an anti-money laundering law is important to us is because we have porous borders with some of our neighbouring countries. Anything can pass through such borders at any time unrestricted. Additionally, the borders of those neighbouring countries with other countries are also porous. In fact, their borders are more porous than what lies between Kenya and themselves. Anything can pass into those countries and find itself in Kenya. Resources can enter into those countries and eventually find their way into Kenya. Terrorism activities can be managed and financed in those countries and permeate into this country. Porous borders are associated with terrorism activities, especially the financing aspect of it. In that respect, therefore, we need punitive penalties and proper implementation of this legislation proposal once enacted into law. This particular Bill provides effective prevention of money laundering. The use of the word “effective” means that we shall have controls that are largely operating to contain money laundering in the country. It will also enable CBK, which is the regulator, to develop prudential guidelines for the banking sector. The CBK will make sure that banks do their work without getting free money or losing money. The Bill is also aimed at strengthening customer due diligence and enabling CBK to come up with good procedures. Additionally, it will make penalties stricter and ensure prudential management of those penalties."
}