Anti-Money Laundering Regulation and Policy Development

Money laundering continues to pose serious risks to financial systems worldwide. In response to evolving global standards and Kenya’s placement on the FATF grey list in 2024, the country has introduced significant legal and regulatory reforms to strengthen its Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) framework.

Here are some key developments shaping Kenya’s AML landscape:

Expanded reporting obligations
The Anti-Money Laundering and Combating of Terrorism Financing (Amendment) Act, 2025 broadens the scope of reporting institutions to include dealers in precious metals and stones and Public Benefit Organizations (PBOs)—sectors previously considered vulnerable to misuse.

Regulation of digital assets
The Virtual Asset Service Providers Act, 2025 introduces Kenya’s first regulatory framework for cryptocurrency exchanges, wallet providers, and other digital asset intermediaries, requiring licensing, customer verification, and suspicious transaction reporting.

Enhanced compliance requirements
The Proceeds of Crime and Anti-Money Laundering Regulations, 2023 strengthen compliance obligations through:
• Risk-based AML assessments
• Customer due diligence (CDD)
• Monitoring of wire transfers
• Mandatory reporting of large cash transactions

Institutional oversight
Key agencies—including the Financial Reporting Centre (FRC), Central Bank of Kenya (CBK), and Assets Recovery Agency (ARA)—play a central role in supervising institutions, analysing financial intelligence, and recovering proceeds of crime.

Aligning with global standards
These reforms are part of Kenya’s broader effort to align with international AML/CFT standards set by the Financial Action Task Force (FATF) and strengthen the integrity of its financial system.

Looking ahead, improving beneficial ownership transparency, strengthening enforcement, and embedding a culture of compliance across both financial institutions and professional sectors will be critical to effectively combating illicit financial flows.

Read more here ANTI-MONEY-LAUNDERING-REGULATION-AND-POLICY-DEVELOPMENT.pdf