Financial Crime World

Kenya’s Central Bank Cracks Down on Money Laundering and Terrorism Financing: A Look at the Regulatory Landscape

Role of the Central Bank of Kenya (CBK)

The Central Bank of Kenya (CBK) is a pivotal player in enforcing compliance with the Proceeds of Crime and Anti-Money Laundering Act, 2009, and related regulations for several financial institutions. These institutions include:

  • Commercial Banks
  • Mortgage Finance Companies
  • Microfinance Banks
  • Money Remittance Providers
  • Foreign Exchange Bureaus
  • Digital Credit Providers
  • Payments Service Providers
  • Mortgage Refinance Companies

By implementing these measures, the CBK aims to safeguard Kenya’s financial system and broader economy from the perils of money laundering, terrorism financing, and proliferation financing. This, in turn, fosters financial sector integrity and enhances national safety and security.

International Compliance

Kenya adheres to international standards of tackling money laundering, terrorism financing, and proliferation financing, as set by the Financial Action Task Force (FATF). The country relies on several primary legislations:

  • Proceeds of Crime and Anti Money Laundering Act, 2009 (POCAMLA)
  • Proceeds of Crime and Anti Money Laundering Regulations, 2013
  • Prevention of Terrorism Act, 2012 (POTA)
  • Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Suppression of Terrorism) Regulations, 2013

The CBK has also issued a Guideline on Anti-Money Laundering and Combating the Financing of Terrorism.

Evaluation and Assessment

ESAAMLG Assessment

In October 2022, Kenya underwent an assessment by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to evaluate its compliance with global anti-money laundering, counter-terrorist financing, and counter proliferation financing (AML/CFT/CPF) standards.

Mutual Evaluation Report of Kenya (September 2022)

The publication of the Mutual Evaluation Report of Kenya (September 2022) on November 9, 2022, offers valuable insights into the current state of Kenya’s AML/CFT/CPF system.

National Risk Assessment (NRA)

Additionally, Kenya conducted a Money Laundering (ML) and Terrorism Financing (TF) National Risk Assessment (NRA) to deepen its understanding of its unique ML/TF landscape. The NRA, launched on July 27, 2022, provides a detailed outline of Kenya’s risk profile, corresponding strategy, and action plan to mitigate identified risks.

Stay Informed

Stay updated on the latest financial crime dynamics, including:

  • The 1267 List (Al-Qaeda Sanctions List)
  • The FATF’s list of high-risk jurisdictions

Visit the United Nations Security Council and FATF websites to learn more.