Financial Crime World

Kenya’s Financial Institutions Under Scrutiny: AML/CFT Policies and Procedures in Place

To strengthen financial sector integrity and enhance safety and security, Kenya’s Central Bank (CBK) is responsible for supervising and enforcing compliance with the Proceeds of Crime and Anti-Money Laundering Act, 2009 and attendant Regulations among various financial institutions. These include:

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

Implementing International Standards

Kenya has committed to implementing international standards on tackling money laundering, terrorism, and proliferation financing as set by the Financial Action Task Force (FATF). The country’s primary legislative framework consists of:

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

CBK Guideline on Anti-Money Laundering and Combating the Financing of Terrorism

The CBK has issued a Guideline on Anti-Money Laundering and Combating the Financing of Terrorism, which outlines the procedures to be followed by financial institutions to prevent:

  • Money laundering
  • Terrorism financing
  • Proliferation financing

Recent Assessments and Reports

Kenya’s AML/CFT system was recently assessed by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which published a Mutual Evaluation Report in September 2022. The report analyzed Kenya’s level of compliance with FATF standards and provided recommendations on how to strengthen its AML/CFT system.

In addition, Kenya conducted a National Risk Assessment (NRA) on money laundering and terrorism financing, launched in July 2022. The NRA is a self-assessment process aimed at deepening understanding of Kenya’s unique money laundering and terrorism financing landscape. The report outlines the country’s specific risk profile and provides a strategy and action plan to mitigate identified risks.

FATF High-Risk Jurisdiction

Kenya has been included on the FATF’s High-Risk Jurisdictions subject to a Call for Action, which requires enhanced due diligence measures to be applied by financial institutions. The list includes countries with significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation.

Overall, Kenya’s efforts to combat money laundering, terrorism financing, and proliferation financing are ongoing, and the country continues to work towards strengthening its AML/CFT system and meeting international standards.