Let MPs not tinker with banking laws

Parliament’s push to remove all the checks that Kenya has over the years established against illicit financial flows, money laundering and financiers of terrorism is not only absurd but grossly discomforting. It is yet one of those moments — and they have become numerous these days — when the political arm of the national leadership chooses to display gross selfishness and total ignorance or a feigning of ignorance in a potentially high-risk matter as the integrity of Kenya’s financial system.

As they clearly told Central Bank of Kenya Governor Patrick Njoroge at a committee hearing on Tuesaday, the MPs want repealed all regulations that require anyone moving more than Sh1 million through the financial system to declare the source, purpose and beneficiaries of such funds.

One only has to listen to their arguments to fathom the toxic personal interest and bad faith that underlines it all. Particularly troubling for the MPs is the demand that they must take a few minutes to fill forms whenever they want to move millions of shillings through the banking system. To be clear, this requirement is reserved for funds that are above the stated Sh1 million threshold or are suspect by multiplicity and location of the transactions.

The MPs’ desire is to reposition Kenya as a country where the financial system is so porous as to allow laundering of stolen public funds, illicit kickbacks for State contracts, money from narcotics and arms trade as well as trafficking in human beings, to name but a few. This is a mission that must not be allowed to succeed.

First, there is the matter of public interest. As Dr Njoroge clearly told the MPs, more than 99 per cent of all bank accounts in Kenya have less than a million shillings — meaning MPs cannot purport to be pursuing a public interest in the matter. This is clearly a self-interest project — and an illicit one to boot.

Then there is the more critical matter of what removal of checks would do to the integrity of Kenya’s financial system, which has in recent years been one of the key drivers of economic growth. Parliament needs reminding that the passing of the anti-money laundering and proceeds of corruption laws and regulations in recent years had its roots in Kenya’s desire to comply with the established international treaties governing the fight against the flow of illicit finance and financing of terrorism.

As the CBK governor rightly warned, removing the checks will lead to immediate delinking of Kenyan banks from the international banking system and a blacklisting of the country as a haven for money-laundering and terrorism financing. The consequences are dire — including a near stoppage of investment inflows.

We call upon Kenyans of goodwill to resist the amendments.