Kenya Ramps Up Anti-Money Laundering Reforms in Bid to Exit FATF Grey List by May 2026

Kenya is intensifying reforms aimed at strengthening its systems for detecting and preventing illicit financial flows as it works toward being removed from the global financial crimes watchdog’s grey list by May 2026.

The country was placed under increased monitoring by the Paris-based Financial Action Task Force (FATF) in February 2024 after shortcomings were identified in its efforts to combat money laundering and terrorist financing. Being on the grey list signals strategic deficiencies in a country’s anti-money laundering and counter-terrorism financing framework, and removal is expected to ease the flow of capital into Kenya while lowering borrowing costs for both businesses and consumers.

National Treasury Principal Secretary Chris Kiptoo outlined the measures the government has undertaken to address the concerns raised by FATF. Among the most significant steps, he said, is the enactment of the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2025, as well as the Virtual Asset Service Providers (VASPs) Act, 2025.

In addition to the new laws, Kiptoo highlighted broader institutional reforms, including stronger coordination among agencies, the adoption of enhanced risk-based customer due diligence practices, improved reporting of suspicious transactions, and deeper inter-agency collaboration across key sectors of the economy.

“Kenya is accelerating reforms to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) framework to address identified gaps and restore full international confidence in the country’s financial system. We are taking decisive actions to complete the remaining reforms and secure Kenya’s exit from the Financial Action Task Force grey list,” Kiptoo explained.

He made the remarks during an anti-money laundering reforms forum held in Nairobi, where he represented Treasury Cabinet Secretary John Mbadi.

According to Kiptoo, the country has tightened controls over illicit financial activity. Under the International Cooperation Review Group process, Kenyan financial institutions and selected firms are implementing stricter customer due diligence measures. These include closer scrutiny of high-risk transactions and the verification of beneficial ownership to prevent misuse of corporate structures.

“We have to put in a lot of work. I doubt that we will be able to prolong the greylisting time. Therefore, to ensure compliance, we must make the most of this time. Thus, we will collaborate with specific principals.”

He further noted that banking institutions have stepped up the reporting of suspicious transactions, supported by improved systems designed to ensure the timely submission and analysis of questionable financial activities. Kenya has also announced that the Directorate of Criminal Investigations, the Attorney General’s Office, and several state departments will implement a coordinated interagency strategy to strengthen enforcement and oversight.

With the reforms underway, Kenyan authorities are expressing confidence that sustained implementation and cooperation across institutions will help restore international confidence in the country’s financial system and pave the way for its removal from the FATF grey list by the targeted May 2026 deadline.

By fLEXI tEAM