Kenya

New Documents

Patrick Njoroge, governor of the Central Bank of Kenya, delivered a speech at the Kenya Fintech Forum where he outlined three objectives that will help advance financial technology and make it as useful as possible.

The Central Bank of Kenya published a discussion paper that explores the possibility of a Central Bank Digital Currency. Comments about the potential issuance of a government-backed digital currency and its potential uses are open to the public and will be accepted until May 20, 2022.

Enforcement Actions

The Central Bank of Kenya issued an enforcement action against Absa Bank Kenya PLC for failing to apply certain anti-money laundering compliance control standards on foreign exchange trades conducted in March 2020.


Important Facts

  • The U.S. State Department classifies Kenya as a major money laundering country. Kenya remains vulnerable to money laundering, financial fraud, and terrorism financing, with money laundering occurring in both the formal and informal sectors. The State Department highlights that the illicit proceeds are derived from domestic and foreign criminal operations. For example, key financial institutions in Kenya engage in currency transactions connected to international narcotics trafficking, involving significant amounts of U.S. currency derived from illegal sales in the U.S. and Kenya. Other criminal activities include transnational organized crime, cybercrime, corruption, smuggling, trade invoice manipulation, illicit trade in drugs and counterfeit goods, trade in illegal timber and charcoal, and wildlife trafficking. Kenya is additionally a transit point, thus making trade-based money laundering a significant problem. Kenya’s proximity to Somalia makes it an attractive location for the use of unregulated networks of hawaladars and other unlicensed remittance systems that facilitate cash-based, and other unreported transfers among foreign nationals, including refugees. The jurisdiction is the financial hub of East Africa and its place at the forefront of mobile banking also make Kenya vulnerable to money laundering.  Despite mobile banking innovations, Kenya does not recognize virtual currency as legal tender and has not adequately altered its anti-money laundering laws to address digital asset risks. The country has also failed to amend its laws to implement anti-money laundering reporting obligations for lawyers, notaries, and other independent legal professionals.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 1 High :
Largely Compliant : 1 Substantial :
Partially Compliant : 15 Moderate :
Non-Compliant : 32 Low :

BASEL i

Rank : 9/141
Score : 7.18/10

TRANSPARENCY INTERNATIONAL i

Rank : 124/179
Score : 31/100

Tax Justice Network i

Rank : 24/133
Score : 76/100