Kenya’s National Assembly has passed a key piece of legislation aimed at bolstering the country’s efforts to combat money laundering and terrorism financing, following its inclusion on the Financial Action Task Force (FATF) grey list earlier this year.
The Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2023 introduces sweeping changes to Kenya’s financial oversight framework. Lawmakers say the revised law is a crucial step in restoring investor confidence and shielding the country from financial isolation.
Among the key provisions, the law tightens regulatory oversight on financial institutions, expands the powers of the Financial Reporting Centre (FRC), and enforces stricter requirements for reporting suspicious transactions. It also increases penalties for non-compliance and sets clearer procedures for the recovery of criminal assets.
Kenya was placed on the FATF grey list in February 2024 due to identified gaps in its anti-money laundering and counter-terrorism financing regime. The grey listing has sparked concern among financial stakeholders, warning it could harm Kenya’s global financial standing and discourage foreign investment.
During parliamentary debate on Wednesday, Majority Leader Kimani Ichung’wah emphasized the urgency of passing the legislation.
“Failure to act decisively would mean continued scrutiny and potential financial isolation. This law is a critical step toward restoring investor confidence and economic stability,” he told MPs.The amended legislation also reflects recommendations from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which has been supporting Kenyan authorities in implementing corrective actions.
With the bill now passed by Parliament, it heads to President William Ruto for assent. Its enactment will strengthen the country’s capacity to disrupt illicit financial flows, long blamed for fueling corruption, undermining governance, and enabling criminal enterprises.
Government officials hope the move will signal Kenya’s commitment to international compliance and improve its standing ahead of the next FATF review.
