Kenya has taken a significant step toward addressing its money‑laundering and terrorist‑financing concerns with a recent amendment to its legislation. Signed on 17 June, the new law seeks to rectify the deficiencies that led to the country’s grey‑listing by the Financial Action Task Force (FATF) in February 2024. Grey‑listing subjects Kenya to heightened monitoring and obliges it to work with the FATF to improve its ability to combat money laundering and terror financing.
The FATF identified several weaknesses in Kenya’s anti‑money‑laundering and counter‑terrorism‑financing framework, including inadequate investigations and prosecutions, a lack of a clear strategy, and unregulated non‑profit organisations (NPOs). It also noted the country’s opaque handling of beneficial‑ownership disclosures and insufficient monitoring of certain entities such as savings and cooperative organisations, law firms, and real‑estate agencies.
In response, Kenya has made progress. By August 2024, 29 of the 40 recommendations issued by the Eastern and Southern Africa Anti‑Money Laundering Group (ESAAMLG) were considered adequately addressed. The new Anti‑Money Laundering and Combating of Terrorism Financing Act introduces significant changes: enhanced oversight, stricter know‑your‑customer requirements, higher penalties for non‑compliance, stronger cross‑border information sharing, and tougher rules to prevent criminals from hiding illicit funds in shell companies.
Nevertheless, key hurdles remain. The government’s commitment to enforcing the provisions—especially against well‑connected individuals who might use their positions to launder crime and corruption proceeds—is crucial. There are also concerns that the new laws could be used to target political opponents and restrict civic space. To be effective, regulatory agencies must be empowered to operate independently and efficiently, curbing money laundering, corruption, and related organised crime.
Public awareness and outreach initiatives, such as the “Talk to Your Regulator” programme, are needed to explain the amendments to stakeholders and dispel fears and misconceptions. The successful implementation of the new law will determine Kenya’s ability to address its money‑laundering and terrorist‑financing challenges. If applied with genuine resolve, the legislation could boost investor confidence, accelerate Kenya’s removal from the FATF grey list, and make it harder for transnational criminal networks and terrorist organisations to operate in the country.
Comments are closed for this story.