Designating lawyers as reporting entities under the Kenya’s anti-money laundering regime

Kennedy Otieno Pambo

Journal of Money Laundering Control, 2020, vol. 23, issue 3, 637-649

Abstract: Purpose - Kenya has made little progress in its endeavor to categorize lawyers as designated non-financial businesses and professionals (DNFBPs), despite making spirited attempts in 2007, 2018 and lately in 2019. The legal professionals are, therefore, not bound by the reporting and other stringent obligations imposed by the Financial Action Task Force (FATF) to deter possible misuse by money launderers. The purpose of this paper, therefore, is to enumerate the ongoing efforts toward designating lawyers as DNFBPs in Kenya. The paper also assesses the institutional and legislative incentives (as well as barriers) for imposing the anti-money laundering (AML) duty thereto. Design/methodology/approach - The paper provides a qualitative review of Kenya’s AML legislative framework and the potential support/hindrance to imposing the AML duty on lawyers. Also, this paper provides a suggestion for possible solutions. Findings - The legislative framework in Kenya has outlawed money-laundering, and lawyers can be compelled to disclose confidential information observed in the course of employment if it embodies crime or fraud. Thus, imposing the AML obligation on lawyers is nothing out of the ordinary, rather a mere creation for a formal disclosure mechanism. However, this paper also revealed divergent views that merit reconciliation for the seamless designation of lawyers. Originality/value - To enhance the legislative framework in Kenya, the paper borrows from the FATF’s Interpretive Note to Recommendation 23 and suggests a practical solution to the apparent conflict between the legal professional privilege and the AML duty.

Keywords: Anti-money laundering; Kenya; Lawyers; Professional privilege (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-07-2019-0063

DOI: 10.1108/JMLC-07-2019-0063

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