The government has said it is dedicated to addressing the strategic shortcomings that led to its inclusion on the Financial Action Task Force grey list.
Kenya was grey-listed on February 23, 2024, due to lack of a clear strategy for prosecuting money laundering offences.
The FATF assessment found that Kenya had not successfully demonstrated any investigations or prosecutions of money laundering cases.
Additionally, the large but mostly unregulated non-profit organisation sector poses a risk for terrorism financing, which remains largely undetected.
A National Risk Assessment conducted in Kenya identified fraud, forgery and drug-related offences as significant threats. However, recovery from these crimes has been relatively low compared to recoveries from misuse of resources and corruption.
On Monday, Treasury PS Chris Kiptoo announced that the government would expedite efforts to correct the technical compliance deficiencies.
“Kenya is committed to addressing the strategic deficiencies identified earlier this year. As PS of the National Treasury, I am committed to fast-tracking these corrections,” he said.
Kiptoo spoke during the opening of the 48th Eastern and Southern Africa Anti-Money Laundering Group task force meeting in Diani.
As Kenya works towards being removed from the FATF grey list, Kiptoo said there is need to review the listing criteria.
He said six out of 21 ESAAMLG member states are under increased FATF monitoring.
“Kenya and Namibia were added to the grey list this year, contributing to the fact that sub-Saharan African countries now make up 12 of the 21 grey-listed jurisdictions globally, which is 60 per cent,” the PS said.
Kiptoo called for a re-evaluation of the International Country Risk Guide listing criteria, particularly in light of the challenges faced by low-capacity countries.
He said the criteria should support rather than hinder the strengthening of national anti-money laundering and counter-terrorism financing regimes.
He also highlighted the growing threats of terrorism, terrorism financing and violent extremism in Southern and Eastern Africa, adding the need for a regional approach to mitigate these risks.
“A threat to one country is a threat to all,” Kiptoo said.
The PS called for greater cooperation, joint training and information sharing among ESAAMLG member countries.
He challenged ESAAMLG to continue addressing itself to new and emerging risks, as criminals continue to find diverse methods and techniques to outwit the measures and the efforts that have been put in place to combat money laundering and terrorist financing.
“The challenges posed by virtual assets and new payment methods will also need to be addressed. Members need to move at the same pace to address new and emerging issues holistically,” he said.
The FATF president and the executive secretary are expected to attend the 48 EMAALG meeting at the South Coast, where the countries will deliberate on the issue of grey-listing.
ESAAMLG task force chairperson Saitoki Maika said the group will be discuss and adopt several follow-up reports, including those from Kenya, Madagascar, Mozambique, Tanzania, Uganda and Zambia, with requests for re-rating.
The meeting will also address the implementation progress of high-level mission reports from Burundi and South Sudan.
Maika said compliance with FATF recommendations varies significantly across ESAAMLG member countries, with some showing strong Anti-Money Laundering / Countering the Financing of Terrorism measures while others struggle with implementation.
“This mixed reality underscores the need for continued improvement in our AML/CFT measures. Our focus in the coming days will be on enhancing technical compliance with FATF standards,” he said.
