Asset Recovery in Kenya: Overview and Explainer

Read CiFAR’s new research paper: Asset Recovery in Kenya

The Kenyan government has been engaged in more recent years in cross-border asset freezing, confiscation, and return of the proceeds of corruption. Nevertheless, it is not lost on many that to a large extent, international cases have begun due to the proactivity of the countries holding stolen Kenyan assets. An example of this is the return of USD 349,057 following the successful case against in the UK against the company Smith & Ouzman for bribery, for which no convictions have yet been handed down in Kenya.

Heightened corruption continues to lead to poor provision of services, increased poverty and inequality.  The abuse of public office for personal gain has been prevalent in Kenya, as indicated by the increased number of cases of corruption and asset recovery. However, while the cases are an indicator of the problem, they also imply improved efforts of anti-corruption agencies and political goodwill to address corruption.

In 2021, His Excellency the former President of Kenya Uhuru Kenyatta was quoted as saying the Kenya loses Kshs.2 billion (USD 16.6 million) per day due to corruption. Whereas this was widely perceived as an admission of failure in his administration’s efforts to stem the tide of corruption, the ire at such an admission may have been misdirected since acknowledgement of the sheer magnitude of the challenge is the first step in addressing the issue.

While newer figures are not available, beyond that cited by President Kenyatta, in 2016, former Ethics and Anti-Corruption Commission (EACC) Chairman Philip Kinisu announced that about Kshs.600 billion (USD 5 billion) was lost to corruption every year. It is not inconceivable that such vast amounts of money are being lost to corruption and this is to the detriment of Kenyan citizens.

The good news is that Kenya has experienced an increase in the number of civil cases seeking the recovery of assets believed to have been acquired through corruption. These asset recovery cases have been found in the news headlines of leading media houses and there is strong indication of increased political will to bring to book politically exposed persons who have abused their position to amass wealth through corruption.

To strengthen this system, a number of issues identified that agencies working on asset recovery and citizens in general need to appreciate and push for change are articulated below.

1. Corruption requires a chain of complex and opaque movements of stolen resources. The agencies must be able to identify these and prove that the assets were acquired illegally. For this they need to make sure they have the human resources available with the skills to understand complex, financial transactions. They also need adequate resourcing and political will to be able to trace, freeze, seize and return the stolen assets.

2. The complexity of cross-border financial investigations requires regional and international cooperation and, when the legal framework or the processes are not harmonized, they create bottlenecks in ongoing investigations and envisaged asset returns. The government of Kenya needs to ensure that it has good connections with authorities in relevant jurisdictions and that it effectively follows the legal processes for asset recovery.

3. Many civil suits instituted for the recovery of assets in Kenya involve public or state officers. Although correlation is not evidence of causation, there have nevertheless been several examples of public sector officials investigated for corruption. This implies that greater efforts at monitoring politically exposed individuals and ensuring mechanisms such as wealth declarations work effectively is key.

4. The Framework for the Return of Assets from Corruption and Crime in Kenya (FRACCK) is an agreement signed by the Governments of Kenya, Switzerland, the United Kingdom and Jersey. FRACCK came into operation on 11th December 2018 when Jersey, the last of the four parties, signed the agreement. FRACCK has so far facilitated the return of approximately Ksh.600 million through two returns done in 2017 and 2022 with regards to the Smith and Ouzman Bribery Case and Samuel Gichuru and Chris Okemo corruption cases. Challenges of implementation still remain, for instance, the Anglo-leasing Scandal cases are still ongoing and while huge assets have been frozen in Switzerland. There is need for convictions to enable the repatriation of the frozen assets.

5. The Financial Action Task Force (FATF) was established in 1989 as an inter-governmental body whose mandate is to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. Indeed, the Kenyan judiciary has recently come out strongly to reaffirm that EACC has powers to investigate money laundering as a crime that is related to corruption. There is need to ensure that Kenya’s legislation and policies are in conformity with FATF standards.

6. A persistent conundrum is the management of assets during the following stages: i) Investigations – when freezing orders are in force; ii) Trials – when injunction orders have been granted pending determination of recovery suits; iii) Adjudication – upon conclusion of a hearing. It was only recently that the EACC managed to obtain court orders appointing a receiver to collect monthly rental income pending a hearing and determination of the asset recovery suit. There is need to develop and implement an Asset Management and Disposal Policy with regards to cases related to proceeds of crime and forfeitures.

The promotion and protection of economic and social rights under Article 43 of the Constitution of Kenya can receive a huge boost from sustained efforts to curb corruption and pursue asset recovery. The recommendations made here can help to achieve these rights.

Read our research paper on asset recovery in Kenya here.

Post written by Rose Wanjiru, CiFAR.