Freight shipping companies, their agents and brokers will be
required to identify the individuals or companies sending or receiving
cargo as way to end illicit trade, once a new law comes into effect
before the end of the year.
Kenya has initiated a
process of drafting a legislation which is expected to be presented to
parliament for enactment to compel importers and exporters to conduct
due diligence on all business people and companies importing and
exporting through the Port of Mombasa, airports and other facilities of
entry.
The law, aimed at curbing illegal transactions
and bringing transparency in the global shipping industry, will also
require banks and other financial institutions to identify who is
sending money and who is receiving it and to assess the risk that the
transaction might be used for illegal purposes.
Kenya
will be the first country in Africa to pioneer the scheme dubbed 'Know
Your Customer" (KYC) which requires customer due diligence by freight
companies and keep precise details of their customers for a stipulated
period of time.
The law will be ideal to Kenya
considering it is East Africa's gateway for trade, particularly imports
and exports which attract more agents of transitional crime due to the
massive cargo it handles at the Kenyan ports and airports.
More than 19 Kenyan government agencies led by Ministry of
Interior, the Treasury and the Judiciary have already endorsed the
scheme which will be a mechanism to fight money laundering and shipments
of fake drugs, narcotics, weapons and wildlife parts.
Currently
freight shipping companies and their agents and brokers are not legally
required to identify the individuals or companies sending or receiving
any package moved worldwide. This has led to a thriving illegal trade.
Interior
Cabinet Secretary Fred Matiang’i, Central Bank Governor Patrick Njoroge
and Director of Public Prosecutions Noordin Haji led other agencies
during the high level conference of senior government officials in
Mombasa in endorsing the scheme meant to block illegal freight.
"The
criminal activities we experience in our financial institution linked
to illegal freight trade has damaged and endangered Kenyan's economy. In
future, banks will have to adopt know your customer scheme before any
transaction is completed but at the same time ensure there is very
little barrier in doing business," said Dr. Njoroge.
"What
we are pushing for is trade facilitators such as import-exporter
agents, shippers and brokers be compelled by law to carry out due
diligence of their customers or to keep appropriate records and this is
what KYC will address."
Use of technology has also been
blamed for advancing illegal trade through Kenyan borders and ports, as
criminal now no longer need physical weapon to advance their
operations.
To protect the 600km Kenyan coastline which
extends from the Kenya-Tanzania border in the south to the
Kenya-Somalia border in the north, Mr Matiang’i said 627 public and
private landing sites and all private jetties will be vetted to control
movement of illegal cargo along the coastline.
Data
from the Anti-Counterfeit Agency, shows imported goods valued at about
$90 million were seized by multi-agency team while more than 8,000
firearms and 300,000 rounds of ammunitions including grenades, mostly
unregistered, were impounded in different border points of the country
last year alone.
According to Financial Secrecy Index
Value 2019, Kenya has been leading in tax loss in Africa, losing more
than Sh40 billion through tax evasion, corruption and money laundering.
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