The Financial Action Task Force (FATF) has officially placed Kenya on the grey list for international Anti-Money Laundering, Countering the Financing of Terrorism, and Proliferation of Weapons of Mass Destruction.
Treasury Cabinet Secretary Njuguna Ndung'u, on Friday, confirmed the recent developments, stating that the new rating necessitates Kenya to enhance monitoring to ensure compliance.
What's a Grey List?
A grey list comprises countries at risk of failing to combat money laundering and terrorism but have made efforts to address the challenges.
"This underscores the imperative for swift and comprehensive action to bolster our compliance efforts. It is important to note that Kenya underwent an assessment conducted by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) in 2022. The evaluation revealed a mixed picture," Ndung'u stated.
Efforts Taken by Kenya to Combat the Vices
He, however, added that the Kenya Kwanza government, after the inauguration, assessed the report and embarked on several interventions and initiatives to implement the recommended actions.
"This required both legal and regulatory reforms as well as a number of institutional actions," the CS disclosed.
Among the measures put in place by Kenya include the enactment of the AML/CFT (Amendment) Act, 2023, which involved a comprehensive overhaul of existing legislation on anti-money laundering and terrorism.
The 2023 Act comprised 17 amendments aimed at addressing various legal and technical compliance deficiencies identified in the Mutual Evaluation Report (MER).
"These amendments represent a crucial step towards aligning Kenya's legal framework with international standards. Kenya has thus demonstrated compliance in certain areas while facing challenges in others," Ngung'u stated.
The amendment of the existing laws was also extended to the Proceeds of Crime and Anti-Money Laundering Regulations, 2013 to align it with the AML/CFT Amendment Act. Treasury gazetted the new regulations on October 6, 2023.
Kenya also reviewed the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2022.
The Central Bank of Kenya and other investigative authorities were ordered to carry out audits to ensure banks, real estate agencies and casinos adhere to the new changes.
Lawyers, through the Law Society of Kenya, also coordinated with relevant authorities including the Financial Reporting Centre (FRC) to help combat money laundering. FRC is an independent body which assists in unearthing proceeds of crime and combating money laundering.
Kenya Pledges to Enhance Monitoring
"Collaboration and technical assistance from these partners will be crucial in our efforts to enhance our framework, strengthen regulatory institutions and expedite our exit from the grey list.
"While there are still strategic deficiencies that require urgent attention, Kenya remains fully committed to implementing the FATF Action Plan comprehensively and expeditiously," Ndung'u promised.
He added that the Treasury will review the developments and seal all loopholes
