“There is suspicion that some of the money that is being collected in piracy is being laundered by purchase of property in several countries, this one being one of them,’’ said government spokesman Alfred Mutua. “Especially at this time when we are facing global challenges of security such as terrorism and others, it is very important for us to know who is where and who owns what.’’
The investigation will also help the government catch tax evaders, he said.
Kenya may be the most attractive spot for pirates to launder their money because it shares a roughly 500-mile border with Somalia and has investment opportunities and a large Somali community of as many as 200,000 people, Mutua said.
In a neighborhood of Nairobi now called Little Mogadishu because of its Somali community, large business and apartment buildings have sprung up. A similar explosion of real estate development can be seen in higher-income areas of the city.
Somali pirates have been paid more than $100 million in ransoms the last two years, said Roger Middleton, a piracy specialist at the London-based think tank Chatham House. The average ransom is also up, from $1 million per vessel a year ago to about $2 million today.
Pirates in Somalia say they invest their ransom money outside their war-torn country, including in Kenya. One pirate who gave his name as Osman Afrah said he bought three trucks that transport goods across East Africa. A second pirate, who only gave his name as Abdulle, said he is investing in Kenya in preparation for leaving the pirate trade.
Kenya also does not have stringent laws against money laundering, though a bill to curb the practice is being debated in Parliament. The US State Department in its annual report by the Bureau of International Narcotics and Law Enforcement Affairs describes Kenya as a major money-laundering country.
