FATF Status

Kenya is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

In February 2024, Kenya made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in September 2022, Kenya has made progress on some of the MER’s recommended actions including by making amendments to its AML/CFT legislation to bring its framework in closer compliance with the FATF recommendations and establishing a case management system to better manage its international cooperation requests. Kenya will work to implement its FATF action plan by: (1) completing a TF risk assessment and presenting the results of the NRA and other risk assessments in a consistent manner to competent authorities and the private sector and updating the national AML/CFT strategies; (2) improving risk-based AML/CFT supervision of FIs and DNFBPs and adopting a legal framework for the licensing and supervision of VASPs; (3) enhancing the understanding of preventive measures by FIs and DNFBPs, including to increase STR filing and implement TFS without delay; (4) designating an authority for the regulation of trusts and collection of accurate and up-to-date beneficial ownership information and implementing remedial actions for breaches of compliance with transparency requirements for legal persons and arrangements; (5) improving the use and quality of financial intelligence products; (6) increasing ML and TF investigations and prosecutions in line with risks; (7) bringing the TFS framework in compliance with R.6 and R.7 and ensure its effective implementation; and (8) revising the framework for NPO regulation and oversight to ensure that mitigating measures are risk-based and do not disrupt or discourage legitimate NPO activity.

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Kenya was undertaken in 2024. According to that Evaluation, Kenya was deemed Compliant for 13 and Largely Compliant for 3 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Kenya's corruption rankings have shown little improvement over the past decade, with the 2023 Global Corruption Perception Index placing it 126 out of 180 countries, a decline from the previous year. The lack of successful prosecutions of high-profile cases has contributed to this deterioration, and corruption remains a significant barrier to foreign direct investment. Although there have been some convictions and legislative measures aimed at combating corruption, enforcement remains inconsistent, and the overall effectiveness of anti-corruption efforts is hindered by weak public institutions.

Kenya's economy demonstrated resilience in 2023, achieving a GDP growth rate of over 5% despite challenges such as high public debt and global supply chain disruptions. The government is focused on attracting foreign direct investment through reforms and initiatives like the Bottom-Up Economic Transformation Agenda, which emphasizes sectors such as agriculture and digital infrastructure. However, bureaucratic hurdles and a high corruption perception continue to pose challenges for U.S. businesses operating in the country.

Kenya has a favorable investment climate, actively attracting foreign direct investment (FDI) through various reforms and initiatives, such as the Bottom-Up Economic Transformation Agenda. The government has implemented tax and regulatory reforms to enhance the business environment, although challenges like bureaucratic delays and corruption persist. Additionally, Kenya's strategic location and membership in regional trade blocs provide investors with access to a vast market, further bolstering its appeal as an investment destination.