Kenya seeks higher rating in fight against dirty money

The Kenyan government has made several amendments to the legislation relating to the fight against money laundering and the financing of terrorism. PICTURES | SHUTTERSTOCK

The Kenyan government aims to receive high marks in its preparedness to combat dirty money.

In a new report, National Treasury revealed it is pushing for a review of its rating, viewing it as largely “partially compliant” with global anti-money laundering and anti-terrorism financing standards, after making several amendments.

Countries that score poorly on fighting financial crime risk being subject to stricter due diligence when dealing with the rest of the world.

A mutual evaluation report by a regional anti-money laundering watchdog has identified several strategic gaps in its framework to combat dirty money.

Read: Intensification of the war against money laundering

However, the government claims to have made various changes to legislation relating to the fight against money laundering and the financing of terrorism (AML/CFT).

In the Draft Budget Policy Statement (BPS) 2024, National Treasury lists some of the three amendments, including the Proceeds of Crime and Anti-Money Laundering Regulations 2023 and the Proceeds of Crime and Anti-Money Laundering Regulations 2023 crime and the fight against money laundering (Criminal Asset Recovery Fund). .

Others are the Prevention of Terrorism (Implementation of United Nations Security Council Resolutions on Suppression of Terrorism) Regulations, 2023 and the Prevention of Terrorism (Implementation of Security Council Resolutions) Regulations, 2023 of the United Nations on the Suppression of Terrorism), 2023.

“In this regard, Kenya has made an application to the ESAAMLG for a Technical Compliance (TC) reassessment following these amendments,” Treasury said.

ESAAMLG, which stands for Eastern and Southern Africa Anti-Money Laundering Group, monitors how the region implements global measures against dirty money.

The 2022 Mutual Evaluation Report (MER) was carried out by ESAAMLG, with Kenya found to be partially compliant with the various standards against money laundering and the financing of terrorism and proliferation.

Read: How the state plans to stop the movement of dirty money across Kenya

Kenya said it has implemented 107 recommended actions identified in the MER and expects a positive review in February 2024.

The objective of the Technical Compliance (TC) reassessment process is to address the deficiencies identified in the MER, demonstrating improved compliance with Financial Action Task Force (FATF) standards and a strengthening of AML/CFT measures.

The reassessment is also used to demonstrate progress in implementing specific requirements of the FATF, the global anti-money laundering watchdog to which ESAAMLG belongs.

In the REM, ESAAMLG called on the Kenyan government to strengthen its anti-money laundering and anti-terrorist financing strategy or risk being placed on the gray list, a move that would damage Nairobi’s reputation as a as the financial center of the region.

Some of the glaring gaps included the absence of appropriate safeguards against terrorist financing, extradition and life insurance benefits. Kenya had also not started appointing lawyers as reporting agents.

Kenya risks joining the FATF’s “grey list”, meaning it will be subject to increased scrutiny over money laundering and terrorist financing risks, if it does not address these strategic deficiencies .