A commentary on the draft Public Financial Management (Public Prosecutions Fund) Regulations, 2024.
Background
Kenya has made significant strides in combating economic crime, particularly in asset recovery through institutions like the Ethics and Anti-Corruption Commission (EACC) and the Assets Recovery Agency (ARA), supported by other law enforcement agencies. These efforts are anchored in legal frameworks such as the Anti-Corruption and Economic Crimes Act (ACECA),2003 and the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA),2009 as well as regulations like the Proceeds of Crime and Anti-Money Laundering (Criminal Assets Recovery Fund) Regulations, 2023.
These frameworks aim to ensure that recovered assets are preserved, managed, and used for public benefit. However, implementation has been inconsistent. For instance, the EACC’s recent handover of money and property was inconsistent with POCAMLA’s Section 110(f), which clearly states that sources of the Criminal Assets Recovery Fund (CARF) should include “any money or property recovered under the Anti-Corruption and Economic Crimes Act, 2003, or any other Act other than money or property recovered on behalf of a public body or person.”
Draft Public Prosecutions Fund regulations: towards more fragmentation
Asset recovery is a complex process that goes beyond merely funding prosecutions. It involves identifying, freezing, managing, and ultimately distributing assets.
The National Treasury and Economic Planning recently invited public comments and inputs on the draft Public Financial Management (Public Prosecutions Fund) Regulations, 2024, with the submission period closing on 22nd October 2024. The draft regulations propose the creation of a fund to support Kenya’s criminal justice system, including asset tracing, confiscation, and recovery, while facilitating collaboration with other government agencies. While the intent to strengthen prosecutions and recover proceeds of crime is commendable, this approach risks causing legal overlaps and conflicts with existing frameworks.
The draft regulations for the Public Prosecutions Fund, however, overlook critical elements, for example it has no provisions for how the amounts shall be shared and what percentage will go towards what function. This can be compared with the CARF regulations, which have to an extent provided directions under Section 113(1), in addition to providing for reporting or auditing the funds. The presumption therefore is that the fund will focus only on prosecution, leaving out vital stages like fair distribution of recovered assets to benefit victims and communities.
The benefits of a National Asset Recovery Policy
Best practices from several global and regional standards identify important considerations when it comes to asset management, this includes the United Nations Convention against Corruption (UNCAC), the African Union Convention on Preventing and Combating Corruption, the Common African Position on Asset Recovery, G8 and FATF guidelines, the Global Forum on Asset Recovery (GFAR) Principles and the Civil Society Principles for the Accountable, Transparent, and Participatory Management of Frozen and Recovered Assets.
They stress the importance of comprehensive asset recovery policies that prioritize transparency, stakeholder participation, and the use of recovered assets for victims, affected communities, and development projects.
While different models for managing recovered assets exist, such as embedding them within law enforcement agencies, Kenya already has a system under the CARF. Introducing multiple funds risks fragmenting the legal and institutional framework, potentially leading to overlapping responsibilities between institutions. This lack of cohesion could undermine the effectiveness of asset recovery efforts.
It would be highly beneficial for the government to consider developing National Asset Recovery Policy. Implementing such a policy would give direction on the harmonization of existing laws, reduce institutional overlaps, and provide clear guidelines on asset management and utilization. It would ensure that all stages of asset recovery, from identification to restoration, are effectively covered, ensuring that Kenya’s fight against economic crimes benefits all citizens, not just the legal system.
In conclusion, while the draft Public Prosecutions Fund Regulations represent a positive step, a comprehensive National Asset Recovery Policy would better serve Kenya. It would streamline processes, promote accountability, and ensure that the fight against economic crime delivers real benefits to the entire country.
Written by Lewis Kundai, CiFAR.