Kenya seeks higher rating in fight against dirty cash


Kenya has been found to have little understanding of terrorism financing, many times confusing it with terrorism. PHOTO | SHUTTERSTOCK

The Kenyan government wants to be given high marks in its preparedness for the fight against dirty cash.

In a new report, the National Treasury has disclosed that it is pushing for a review of its rating of being largely ‘partially compliant’ to global standards on anti-money laundering and terrorism financing after it made several amendments.

Countries with poor ratings in terms of fighting financial crimes risk being subjected to stricter due diligence when it is dealing with the rest of the world.

A mutual assessment report by a regional anti-money laundering watchdog identified several strategic deficiencies in its framework for the fight against dirty cash.

However, the government says it has made various amendments to legislations relating to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

In the 2024 draft Budget Policy Statement (BPS) the National Treasury lists some of three amendments, including the Proceeds of Crime and Anti-Money Laundering Regulations, 2023, Proceeds of Crime and Anti-Money Laundering (Criminal Assets Recovery Fund) Regulations, 2023.

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

“In this regard, Kenya has filed a request with the ESAAMLG for Technical Compliance (TC) re-rating as a result of these amendments,” said Treasury.

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

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

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

The purpose of the Technical Compliance (TC) re-rating process is to address the deficiencies identified in the MER, by showing there is improved compliance with Financial Action Task Force (FATF) standards and strengthening of AML/CFT measures.

Re-rating is also used to demonstrate progress in the implementation of the specific requirements of the FATF, the global anti-money laundering watchdog to which ESAAMLG belongs.

In the MER, the ESAAMLG asked the Kenyan government to strengthen its strategy in the fight against money laundering and terrorism financing or risk being grey-listed, a decision that would hurt the standing of Nairobi as the financial centre of the region.

Some of the glaring deficiencies included the lack of proper safeguards against terrorism financing, extradition, life insurance benefits. Kenya had also not started appointing lawyers as reporting agents.

Kenya risks joining the FATF’s ‘grey list,’ which means it will be placed under increased monitoring when it comes to risks of money laundering and terrorism financing, should it not address these strategic deficiencies.

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