Nairobi — Financial Action Task Force (FATF), a global anti-money laundering watchdog, has placed Kenya on the 'grey list', signaling heightened monitoring.
Treasury CS Njuguna Ndung'u said that the placement of Kenya on the list portends enhanced monitoring to ensure compliance with international Anti-Money Laundering, Countering the Financing of Terrorism, and Proliferation of Weapons of Mass Destruction (AML/CFT/CPF) obligations.
The CS added that Kenya revealed mixed reactions to an assessment conducted by the South African anti-money laundering group ESAAMLG in 2022.
This led the government to embark on a number of interviews and initiatives to come up with legal and regulatory reforms as well as institutional actions.
However, he stated that the country has demonstrated compliance in certain areas while facing challenges in others.
"One significant achievement was the enactment of the AML/CFT (Amendment) Act, 2023, which involved a comprehensive overhaul of existing legislation," Ndung'u noted.
This legislative reform, he said, comprised 17 amendments aimed at addressing various legal and technical compliance deficiencies identified in the Mutual Evaluation Report (MER).
He further stated that the government reviewed the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2022, to align them with the amended Act, and published the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2023, which were also gazetted on October 6, 2023.
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He noted that all regulatory agencies, including the Central Bank of Kenya enhanced their AML/CFT by developing new supervision manuals and carrying out risk based inspections to enforce compliance with the Act.
Other interventions, he said, included assigning lawyers as reporting entities under the Proceeds of Crime Act and the Anti-Money Laundering Act, which made the law society of Kenya a self-regulatory body.
He emphasized Kenya's commitment to implementing the FATF Action Plan comprehensively, saying that it has employed the active participation of the National Treasury, which seeks minimal effects on the country's financial stability and the cost of conducting 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 elaborated.
He said the government will spare no effort in addressing identified deficiencies and working towards a swift exit from the grey list.
