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CBK Issues Guidelines for Businesses to Combat Money Laundering in Kenya

The Central Bank of Kenya (CBK) has reiterated its commitment to ensuring that Kenya’s financial system and broader economy are protected from money laundering, terrorism financing, and proliferation. The bank has issued guidelines for businesses operating in the country to prevent and combat these illegal activities.

Kenya Committed to International Standards

Kenya is fully committed to implementing international standards on tackling money laundering, terrorism financing, and proliferation financing as set by the Financial Action Task Force (FATF). The country’s primary legislative framework to combat these crimes consists of the Proceeds of Crime and Anti-Money Laundering Act, 2009, and attendant Regulations.

Guidelines for Businesses

The CBK has issued a Guideline on Anti-Money Laundering and Combating the Financing of Terrorism, which outlines the measures that businesses must take to prevent money laundering and terrorism financing. The guideline applies to:

  • Commercial banks
  • Mortgage finance companies
  • Microfinance banks
  • Money remittance providers
  • Foreign exchange bureaus
  • Digital credit providers
  • Payments service providers
  • Mortgage refinance companies

Mutual Evaluation Report

Kenya underwent an Anti-Money Laundering, Counter Terrorist Financing, and Counter Proliferation Financing assessment by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) in 2022. The Mutual Evaluation Report of Kenya was published on November 9, 2022, and it assesses the country’s compliance with global AML/CFT/CPF standards.

National Risk Assessment

Kenya has also conducted a National Risk Assessment (NRA) to identify specific risk areas related to money laundering and terrorism financing. The report was launched on July 27, 2022, and outlines:

  • The country’s unique risk profile
  • A corresponding strategy and action plan to mitigate identified risks

List of High-Risk Jurisdictions

The CBK has also highlighted the need for businesses to be aware of high-risk jurisdictions that have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation. The Financial Action Task Force (FATF) maintains a list of such jurisdictions, which is available on its website.

Conclusion

In conclusion, the CBK has emphasized the importance of implementing effective anti-money laundering measures to protect Kenya’s financial system and broader economy from money laundering, terrorism financing, and proliferation. Businesses operating in Kenya are urged to familiarize themselves with the guidelines issued by the CBK and take necessary steps to prevent and combat these illegal activities.