The Financial Action Task Force (FATF), a global anti-money laundering watchdog, has placed Kenya on the ‘grey list’, indicating increased scrutiny.
According to Treasury CS Njuguna Ndung’u, Kenya’s inclusion on the list signals increased monitoring to guarantee compliance with international Anti-Money Laundering, Countering the Financing of Terrorism, and Proliferation of Weapons of Mass Destruction (AML/CFT/CPF) requirements.
According to the CS, Kenya’s response to an evaluation done by the South African anti-money laundering body ESAAMLG in 2022 was uneven.
This prompted the government to conduct a series of interviews and measures to develop legal and regulatory reforms, as well as institutional actions.
However, he added that the government has exhibited conformity in some areas while experiencing difficulties in others.
“One significant achievement was the enactment of the AML/CFT (Amendment) Act, 2023, which involved a comprehensive overhaul of existing legislation,” he said.
This legislative reform, he explained, included 17 revisions targeted at correcting different legal and technical compliance issues revealed in the Mutual Evaluation Report (MER).
He went on to say that the government reviewed the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2022, to ensure they were in line with the amended Act, and then published the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2023, which were also gazetted October 6, 2023.
He stated that all regulatory agencies, including the Central Bank of Kenya, improved their AML/CFT by establishing new supervision manuals and conducting risk-based inspections to ensure compliance with the Act.
Other actions, he added, included appointing attorneys as reporting organisations under the Proceeds of Crime Act and the Anti-Money Laundering Act, transforming Kenya’s law society into a self-regulatory entity.
He emphasised Kenya’s commitment to fully implementing the FATF Action Plan, stating that the National Treasury has actively participated in the process, which aims to have minimum repercussions on the country’s financial stability and the cost of doing business in Kenya.
“As a country that has witnessed the devastating effects of terrorism and money laundering, Kenya reaffirms its dedication to combating money laundering, terrorism financing, and proliferation risks,” he said.
He stated that the administration will make every effort to remedy identified inadequacies and get off the grey list as soon as possible.