Kenya is intensifying efforts to exit the Financial Action Task Force (FATF) grey list by strengthening beneficial ownership disclosures, financial investigations and oversight of institutions vulnerable to money laundering and terrorism financing. The government has outlined additional reforms as it works to address outstanding deficiencies identified by the international financial crime watchdog.
The National Treasury has committed to improving transparency around the individuals who ultimately own or control companies. The proposed measures are intended to help authorities identify concealed ownership structures, trace suspicious transactions and investigate the movement of potentially illicit funds.
Kenya was placed under increased monitoring by FATF in February 2024 over weaknesses in its anti-money laundering and counter-terrorism financing framework. Countries on the grey list are expected to work with the watchdog to address identified shortcomings and strengthen enforcement.
The latest push includes improving compliance with requirements for companies to disclose beneficial owners. These are individuals who ultimately own or exercise significant control over a business, even when their interests are held through other companies or legal arrangements.
Authorities want more reliable ownership information to support investigations involving corruption, tax evasion and other financial crimes. The disclosures can also help officials identify individuals who may benefit from public contracts or suspicious financial transactions while remaining hidden behind corporate structures.
The government is also strengthening the regulatory framework for trusts. The Trust Administration Act, 2026, requires existing trusts to submit beneficial ownership registers within 24 months of the law coming into force. The information is intended to improve access for relevant authorities and institutions responsible for identifying financial crime risks.
The reforms build on legislative changes, including amendments to anti-money laundering and counter-terrorism financing laws in 2025 and the Virtual Asset Service Providers Act, 2025. The latter established a framework for licensing and supervising businesses dealing in digital assets.
Financial Reporting Centre Director-General Naphtaly Rono told a parliamentary committee earlier in October that Kenya had addressed 19 of the 21 items in its FATF action plan. He expressed optimism that the country could exit the grey list by April 2027, although the outcome depends on completing the required actions and the watchdog’s assessment.
The grey-list status matters because international banks, investors and business partners assess countries’ financial controls when deciding how to manage transactions and commercial relationships. Removal could help improve confidence, although it would not automatically guarantee increased investment or cheaper financing.
Challenges remain in translating legislation into effective investigations, supervision and successful prosecutions. A 2025 Financial Reporting Centre risk assessment identified significant medium- and high-risk exposure among entities in sectors including real estate and legal services.
The Treasury says it will continue coordinating government agencies and reporting progress to FATF and the Eastern and Southern Africa Anti-Money Laundering Group. Kenya’s ability to demonstrate effective enforcement, not just the adoption of new laws, will be central to its efforts to secure removal from increased monitoring.
