NAIROBI – The Parliament has passed the revised Money Laundering and Counterterrorism Financing Act in response to the state’s inclusion in the Financial Action Task Force (FATF) greylist.
The amendment is part of the 2023 Crime and Money Laundering Anti-Revenue (Amendment) Bill, which aims to strengthen the legal framework for financial transparency and compliance with international obligations.
The law introduces stricter regulatory oversight on financial institutions, expands the powers of the Financial Reporting Centre (FRC) and requires more strict reporting of suspicious transactions obligations.
It also provides an overview of clearer mechanisms for asset recovery, promoting penalties for non-compliance.
Kenya was on the FATF greylist in February 2024, raising concerns about the country’s financial reputation and ability to attract foreign investment.
The grey list follows a survey that Kenya has strategic flaws in combating money laundering and terrorist financing.
During debate in Congress on Wednesday, lawmakers stressed the urgency of legislation.
Majority leader Kichung’wah warned that the country is at risk of isolation.
“Don’t act decisively means continuous scrutiny and potential financial isolation. This law is an important step towards restoring investor trust and economic stability.”
The new law also seeks to align Kenya with recommendations from the Kenya Anti-Moneying Group (ESAAMLG).
Once enacted, the law denies regulators for empowering them to crack down on illegal financial flows, eroding public trust, promoting corruption, and enabling criminal enterprises.
Passing the bill now paves the way for consent by President William Root as the government competes to demonstrate compliance with the FATF benchmark prior to its next assessment.
