Kenya, being added to the list of high-risk third countries for anti-money laundering, is a risk too big to ignore.
This places Kenyan banks, fintechs, exporters and professional service firms under a much harsher compliance spotlight, potentially complicating even the most routine transactions.
In essence, this means that auditors, lawyers, crypto firms and other obliged entities must now implement heightened verification protocols when onboarding or transacting with Kenyan clients.
These requirements include collecting more detailed documentation on corporate structures and beneficial ownership, verifying the source of funds and wealth, obtaining senior management approval before engaging and continuously monitoring the business relationship for red flags.
This translates to increased delays, higher compliance costs and in some cases, rejections.
To reverse this trajectory, Kenya must move quickly to seal
loopholes or risk throwing the financial system and global security into
jeopardy.
The Money Laundering and Terrorism Financing Trends and Typologies Report 2025 by Financial Reporting System flagged suspicious transactions valued at Sh6.97 trillion, almost half of the country’s gross domestic product, with banks handling 91 per cent of the transactions.
These glaring statistics should be a wake-up call for President William Ruto’s administration to sanitise the country’s financial system, as the country is not short of laws and resources to end the menace.
For instance, the regime must make use of the recently signed amendments to the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2025, to swiftly look into real estate agencies and shell companies that are aiding illicit financial flows.
Although the country has made tremendous efforts to meet compliance, having improved its technical compliance with 28 out of 40 Financial Action Task Force recommendations, effectiveness remains low in nine out of 11 key outcomes, a major hurdle to exiting the grey list.
