Written by Lisa Murimi
The European Commission has officially placed Kenya on its updated list of high-risk countries with “strategic deficiencies” in their anti-money laundering and counter-terrorism financing (AML/CFT) frameworks, marking a significant setback in the nation’s financial reputation.
Kenya joins ten other countries, including Algeria, Angola, Côte d’Ivoire, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela, on a list that flags jurisdictions posing a potential threat to the integrity of the EU financial system.
The Commission’s move follows last year’s decision by the Financial Action Task Force (FATF) to grey-list Kenya for similar shortcomings.
This means Kenya is now under intensified scrutiny, both globally and within the EU, and must take urgent steps to address regulatory and enforcement gaps in curbing money laundering and the financing of terrorism.
“The updated list takes into account the work of the Financial Action Task Force (FATF) and, in particular, its list of ‘Jurisdictions under Increased Monitoring’. As a founding member of FATF, alignment with FATF is important for upholding the EU´s commitment to promoting and implementing global standards.”
“The Commission has carefully considered the concerns expressed regarding its previous proposal and conducted a thorough technical assessment, based on specific criteria and a well-defined methodology, incorporating information collected through the FATF, bilateral dialogues and on-site visits to the jurisdictions in question,” the statement added.
Businesses and financial institutions operating in and with Kenya may now face tighter due diligence requirements, making cross-border financial activity more complex and costly.
This development raises alarms as it highlights Kenya’s vulnerability to transnational crimes and undermines efforts to build investor confidence in its banking and financial sectors.
While the EU has simultaneously removed countries like the UAE, Senegal, and the Philippines from the list, recognizing progress made, Kenya’s inclusion signals the need for urgent and credible reforms.
The European Commission will continue monitoring progress and supporting listed countries to implement action plans in line with FATF recommendations.
The updated list, part of a delegated regulation, will come into effect unless blocked by the European Parliament or Council within a month.
