Kenya is implementing reforms to strengthen its anti illicit financial flow laws in an effort to exit the grey list.
The East Africa economic powerhouse was placed on the Financial Action Task Force (FATF) grey list in February 2024 after an evaluation of the country’s adherence to global standards and recommendations for combatting money laundering and related financial crimes found weaknesses.
On Monday, the National Treasury said that these reforms aim to address technical deficiencies, align with international standards, and restore full international confidence in Kenya’s financial system.
Speaking during a meeting by a multi agency committee to spearhead reforms, National Treasury PS, Chris Kiptoo said that Kenya enacted significant legislative reforms.
“Kenya remains fully committed to addressing the gaps identified by the FATF and the EU. Our reforms are deliberate, measurable, and geared toward ensuring Kenya exits the grey list while maintaining the integrity and resilience of our financial system,” Kiptoo said.
He, for instance, cited the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2025, saying that it provides a robust legal framework to close identified gaps and ensure compliance with global standards.
During the meeting, the delegation undertook a comprehensive review of Kenya’s progress under the International Cooperation Review Group (ICRG) process, focusing on the
Legislative and regulatory reforms
It noted that key amendments have been enacted to address technical deficiencies and provide clear mandates for AML/CFT implementing agencies.
On institutional strengthening, the AML/CFT Committee’s operations are being institutionalised, including through the budget cycle, to ensure reforms are sustainably funded and effectively executed.
It has enhanced risk-based Customer Due Diligence (CDD), with financial institutions and designated businesses implementing stronger CDD measures, including verification of beneficial ownership and monitoring of high-risk transactions.
Furthermore, enhanced mechanisms are in place to ensure timely reporting and analysis of suspicious financials.
It noted that state agencies are collaborating to harmonise reporting, supervision, and enforcement actions across sectors, from banking and mining to interior security operations.
The committee, headed by Saitoti Maika, director‑general and CEO of the Financial Reporting Centre (FRC), highlighted that significant strides have been made in strengthening Kenya’s regulatory and institutional reforms.
He emphasized that “substantial progress has been made across all fronts, but sustained effort and continued coordination among government agencies remain critical to achieving full compliance and restoring global confidence in Kenya’s financial sector.”
These reforms are not only about meeting international obligations but also about protecting Kenya’s economy, attracting foreign investment, safeguarding jobs, and preventing the misuse of financial systems for illicit activities, including terrorism financing.
The commttee insisted that Kenya remains committed to pursuing all necessary steps, including appealing the current listing and accelerating institutional and legal reforms, to ensure a swift exit from the grey list and a fully compliant, transparent, and globally trusted financial system.
Those in attendance include Interior Security PS , Raymond Omollo and his mining counterpart, Hillary Kimtai.
According to Global Financial Integrity (GFI), Kenya’s reputation as a stable and transparent financial environment is likely to be compromised, potentially discouraging foreign investment and deterring businesses from operating in the country
Research indicates a reduction in foreign direct investment (FDI) to GDP ratio by up to two per cent for countries with low FATF scores.
The same research shows that FDI inflows can decline by three per cent, portfolio inflows by 2.9 per cent, and other investment inflows by 3.6 per cent of GDP.
