VZCZCXYZ0009
PP RUEHWEB

DE RUEHNR #4422/01 2890400
ZNR UUUUU ZZH
P 160400Z OCT 06
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 4886
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC

UNCLAS NAIROBI 004422 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR S/CT NOVIS, INL/C/CP RINDLER, ISN/ECC HARTSHORN, 
AF/E, AND AF/EPS HASTINGS 
DEPT PASS TO FDIC 
 
E.O. 12958:  N/A 
TAGS: EFIN PTER ECON KE
SUBJECT: MONEY LAUNDERING IN KENYA: FDIC TRAINING A SUCCESS 
SENSITIVE BUT UNCLASSIFIED 
 
 
¶1. (SBU)  Summary: Kenyan participants in the FDIC's September bank 
supervision regulatory training class praised the course highly and 
said they would apply elements to Kenya's own draft anti-money 
laundering (AML) bill.  They suggested increased case studies, 
practical visits to agencies, tips for trainers, and opportunities 
for interaction among the students.  EconOff advised them the next 
INCSR/AML report would reflect the revelations of widespread, 
massive money laundering from the Charterhouse scandal (septel), and 
urged them to encourage their agencies to push the AML bill's 
passage and renew their investigation of Charterhouse and Paramount 
Banks.  End Summary. 
 
¶2. (SBU) After being nominated by the Embassy Nairobi Economic 
section, five Kenya government officials participated on FDIC 
Regulatory training on anti-money laundering training for trainers' 
course held September 18-22, 2006 in Rosslyn, VA.  The Kenyan 
participants drawn from the interagency Anti-Money Laundering Task 
Force (AMLTF) were: James Manyonge, Assistant Director, Legal 
Services, Banking Supervision, Central Bank of Kenya (CBK); Samuel 
Rono, Assistant Manager, Banking Supervision, CBK; Francis Okonya, 
Assistant Commissioner of Police and Director, Banking Fraud 
Investigations Unit, CBK; Samuel Keter, Parliamentary Counsel, 
Attorney General's Office; and James Buyela, Assistant Commissioner, 
investigations, Kenya Revenue Authority (KRA).  FDIC funded all the 
participants' costs. 
 
¶3. (SBU) On October 3, Acting Econ Counselor and Econ Specialist met 
with the participants to get their feedback on the course.  The 
participants were very positive about the course, and enjoyed the 
experience.  The course was well-taught, and they enjoyed meeting 
students from other countries.  They confirmed the course work was 
relevant to their work and provided valuable inputs for revising 
Kenya's draft anti-money laundering bill, which they expect will be 
tabled in Parliament before the end of 2006.  They noted that, in 
the absence of AML legislation, KRA is the agency handling 
AML-related cases as it evident that perpetrators of AML do not pay 
taxes.  They hope that FDIC will enable more of their colleagues to 
attend the course to expand the knowledge base at their agencies. 
 
Comments on the course by the participants: 
------------------------------------------ 
¶4. (SBU) The participants made the following specific suggestions 
for future iterations of the course: 
 
- The course schedule was intense.  It would be useful to have an 
informal social event with the other participants get to know one 
another, and a joint dinner during the course of the training. 
 
- Spend more time on case studies, and use more references and case 
studies from developing countries, especially on setting up 
financial intelligence units. 
 
- Include some American students in the class to provide their 
perspectives and experience. 
 
- To obtain more regional perspectives on AML/CTF, hold a roundtable 
discussion or divide the class into subgroups with reps from each 
region to discuss specific issues and then report to the entire 
class. 
 
- Provide practical experiences like a visit to the FIU, the stock 
exchange, insurance or real estate professional associations, or 
other avenues for money laundering.  While this would require 
extending the class length, it would greatly enhance the course 
experience. 
 
- Include information on asset recovery and actual operations of 
FIUs. 
 
- Include a session on tips for trainers to prepare them to train 
their colleagues. 
 
Use Your Knowledge 
------------------ 
¶5. (SBU)  Acting Econ Counselor thanked the participants for their 
insights, but then expressed the concerns of the USG, other donor 
countries, and the IFIs about the large-scale money-laundering 
exposed by the Charterhouse and Paramount Bank scandals (septel). 
He warned that the 2007 INCSR money laundering report would correct 
the 2006 report's conclusion that Kenya's financial sector was not 
being used for money laundering, and urged them to push their 
agencies to address Charterhouse, Paramount and the other banks as 
soon as possible.  He noted that UNODC and the World Bank were ready 
 
to provide technical assistance, and the USG could help set up an 
FIU.  The Kenyan officials were fairly confident the GOK would send 
the AML bill to Parliament soon, and that Parliament would pass it 
before the end of 2006.  They believed focusing on the anti-crime, 
anti-corruption aspects of the bill would make it difficult for 
opponents to block it with allegations it targeted the Muslim 
community, or was the result of USG pressure. 
 
Comment 
------- 
¶6. (SBU) Keter's statement that he had almost finished amending the 
AML bill to harmonize it with existing laws, and would send it to 
the Ministry of Finance soon for publishing matches statements from 
senior KOK officials.  He also confirmed the implementing 
regulations are done.  Once the bill is published, Post will work 
with or through UNODC, the World Bank and other donors to support 
passage. 
 
Hoover