TerraLex Guide to Anticorruption Legislation

In July 2020, Kenya ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention). The Convention is a multilateral instrument authored by the OECD. The objective of the Convention promotes tax cooperation to combat tax evasion and tax avoidance through international cooperation on exchange of information between state parties. It further facilitates better operation of tax laws while respecting fundamental rights of Taxpayers. The implication to Kenyans is that the Kenya Revenue Authority will have access to information that it previously would not have had access to. On the continental side, Kenya is a member of the Africa Initiative (AI) in conjugation with other African countries to ensure African countries unlock the potential of tax transparency and exchange of information for Africa.

The primary legislation that addresses anti-corruption in Kenya is the Anti Corruption and Economic Crimes Act No 3 of 2003 of the Laws of Kenya. The main aim of the Act is to provide for the prevention, investigation and punishment of corruption, economic crime and related offences and other matters incidental thereto. The Act provides for the formation of the Kenya Anti-Corruption Advisory Board consisting of various members to be nominated from various bodies such as the Law Society of Kenya, the Federation of Kenya Employers, the Central Organisation of Trade Unions, among others. Other legislations that address anti-corruption include:

1. The Ethics and Anti Corruption Commission Act No 22 of 2011 of the Laws of Kenya –The Act provides for the functions and powers of the Ethics and Anti Corruption Commission. The Act provides for the formation of the Ethics and Anti Corruption Commission tasked with, among other things, creating a code of ethics to be adhered to by public and state officers, receiving complaints on the breach of the code of ethics by public officers and recommending to the Director of Public Prosecutions appropriate action to be taken against State or public officers alleged to have engaged in unethical conduct.
2. The Bribery Act No. 47 of 2016 of the Laws of Kenya. The Act is to provide for the prevention, investigation, and punishment of bribery and for connected purposes. The Act establishes bribery offences in both the public and private sectors and applies to the public, public officers, and private entities. It further imposes a duty on private entities to have in place procedures that prevent bribery.
3. Proceeds of Crimes and Anti-Money Laundering Act No 9 of 2009 of the Laws of Kenya. The Act is to provide for the offence of money laundering and to introduce measures for combating the offence, to provide for the identification, tracing, freezing, seizure, and confiscation of the proceeds of crime, and for connected purposes.

The Anti Corruption and Economic Crimes Act prohibits various forms of corruption as follows: 1. Secret inducements for advice. A person is guilty of an offence if the person receives or solicits a benefit that is an inducement or reward for or otherwise on account of the giving of advice to a person. 2. Conflict of interest. An agent with direct or indirect private interest in a decision that his principal is to make then the agent is guilty of an offence. 3. Improper benefits to trustees for appointments. This offence applies to a benefit that is an inducement or reward for the appointment of a person as a trustee of property or for assisting in such an appointment. 4. Bid Rigging. This offence is in respect to a benefit that is an inducement or reward for refraining from submitting a tender, proposal, quotation/bid, withdrawing or changing; and submitting a tender, proposal, quotation or bid with a specific price or with any specified inclusions or exclusions. 5. Section 45 of the Act prohibits the unlawful acquisition, disposition, and damage to public property. It further prohibits the making of fraudulent or excessive payment from public revenues for substandard or defective goods, goods not supplied or not supplied in full, or services not rendered or inadequately rendered. This section also addresses the failure to comply with the law or applicable procedures and guidelines relating to procurement. 6. Abuse of Office 7. Dealing with suspect property 8. Attempts and conspiracies of the offences stated above.

The Bribery Act has the following offences:

1. Prohibits the giving and taking of a bribe in both the private and public sectors.
2. Makes it an offence to not report to the Commission if a state office, public officer, or any other person holding a position of authority in a public or private entity becomes aware or is suspicious of instances of bribery.

Proceeds of Crimes and Anti-Money Laundering Act prohibits Money laundering – knowing or should have reasonably known that property forms part of the proceeds of crime, acquiring/using or being in possession of property knowing or should have known that the same forms part of the proceeds of a crime, failure to report suspicion regarding proceeds of crime, tipping off a person who is being investigated for money laundering.

The Bribery Act provides for the bribery of foreign public officials. Section 8 states that a person who bribes a foreign public official with the intention of influencing that official’s capacity commits an offence.. Such person shall be guilty if he or she directly or through a third party promises or gives any financial or other advantage to the foreign official or to another person at the foreign official’s request or with the foreign official’s assent or acquiescence and the foreign official is not permitted or required by the written law applicable to him or her to be influenced in his or her capacity as a foreign public official by the offer, promise or gift. Influencing a foreign official means influencing such official in the performance of their functions including any omission to exercise those functions and any use of position as such official even if not within the official’s authority.

Yes. According to Section 10 of the Bribery Act, a private entity is guilty of an offence if a person associated with it bribes another person intending to obtain or retain business for the entity or an advantage in the conduct of business by the private entity. In Section 11, a person is deemed to be associated with another person if the person performs services for or on behalf of that other person as an agent employee or in any other capacity. Section 16 of the Act further provides for bribery offences committed by a private entity or partnership. If the offence is proven to have been committed with the consent or connivance of a senior officer of the private entity or partnership or a person purporting to act in such capacity; the senior person or other person and the body corporate and partnership shall be deemed to have committed an offence and liable for prosecution.

No. The Bribery Act prohibits the giving of bribes, offers, promises or financial or other Advantage. Section 2 of the aforementioned Act defines the term ‘advantage’ to include any facilitation payment made to expedite or secure performance by another person.

Yes. According to Section 15 of the Bribery Act and Section 67 of the Anti Corruption and Economic Crimes Act, conduct by a citizen of Kenya or by a private or public entity which takes place outside of Kenya shall constitute an offence if the conduct would constitute an offence under the act if it took place in Kenya. Such offences committed by agents or other third parties are attributed to a company/Partnership if the offence is committed with the consent or connivance of a senior officer of the private entity or partnership or a person purporting to act in such capacity. In this instance, the senior officer or other person and the body corporate or partnership shall be deemed to have committed an offence. The determination as to whether a person performs services on behalf of another person shall be made by reference to all the relevant circumstances and not only the reference to the nature of the relationship.

Yes. The conduct by a citizen of Kenya or by a private or public entity which take place outside of Kenya shall constitute an offence if the conduct would constitute an offence under the Act if it took place in Kenya.

Yes. Directors of a company are personally liable only to the extent that the offences are committed with their consent or connivance. Directors or senior officers of private entities shall also be held personally liable where a private entity fails to put in place procedures to prevent bribery and corruption as provided in the Bribery Act. However, any conduct by directors on behalf of the company shall be attributed to the company.

According to the Bribery Act: An Individual found guilty of Bribery shall be liable on conviction to imprisonment for a term not exceeding 10 years or to a fine not exceeding Kenya Shillings five million (KES 5,000,000 /-) or both. He or she may be liable to an additional mandatory fine if as a result of the conduct constituting the offence, the person received a quantifiable benefit or any other person suffered quantifiable loss. The Act provides for a mandatory fine equal to five times the amount of the benefit or loss. A private entity found guilty of an offence under the Act is liable on conviction to a fine to be determined by the Court. The Courts in this provision are empowered to mete out punishment not only for the offence committed but also to deter similar offences by the same or other private entities. In addition to imprisonment or fine, the court may order the convicted person or /public entity to pay back the amount or value of any advantage received, to the government. If the convicted person is a director of a company, such person shall be disqualified from holding the position of director in that or any other company in Kenya for a period of not more than 10 years. If the convicted person is a State officer or a public officer, such person shall be barred from holding public office. A person other than a natural person, convicted of bribery, shall be disqualified from transacting business with the national or county government for a period of ten years after such conviction. Notwithstanding the penalty prescribed the Court shall order the confiscation of any property acquired as a result of the advantage received by the convicted person or private entity.

According to the Anti Corruption and Economic Crimes Act: In addition to the sanctions imposed in the Bribery Act above, this Act further establishes that a person convicted shall be liable for a fine not exceeding Kenya Shillings One Million (Kshs. 1,000,000/-) or imprisonment for a term not exceeding ten (10) years or both. The court can also impose an additional mandatory fine if as a result of the conduct that constituted the offence, the person received a quantifiable benefit or any other person suffered a quantifiable loss The mandatory fine shall be equal to two times the amount of the benefit or loss.

The Act in Section 55 provides that where upon investigation, a person is found to have unexplained assets, they are required to forfeit the same to the Government. This is applicable where the person has been afforded a reasonable opportunity to explain the disproportion between the assets concerned and his known legitimate sources of income and the Ethics and Anti Corruption Commission is not satisfied that an adequate explanation of that disproportion has been given.