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Kenya remains on the European Union’s list of high-risk jurisdictions for money laundering and terrorism financing, even as Uganda has been officially removed following significant compliance improvements. The EU published the updated grey list on Tuesday, maintaining Kenya’s status amid ongoing concerns about deficiencies in its anti-money laundering and counter-terrorism financing (AML/CFT) framework.
The decision comes as Kenya’s Financial Reporting Centre (FRC) flagged a sharp uptick in suspicious financial activity in its 2024 annual report. The country recorded 7,193 suspicious transactions related to money laundering, an 18.73% increase from 6,058 the previous year. Transactions linked to terrorism financing also rose significantly, with 94 reports filed in 2024, up from 72 in 2023—a 30.55% year-on-year increase.
Capital markets and securities operators also came under scrutiny, reporting 93 suspicious transactions last year, up from just 26 in the prior year. All these cases were linked to money laundering concerns.
While the EU did not directly attribute its decision to the FRC data, the Commission cited ongoing weaknesses in Kenya’s AML/CFT system, including limited prosecutions and enforcement actions, insufficient regulation of virtual assets and non-profits, and the lack of a robust risk-based supervisory framework.
“The Commission has conducted a thorough technical assessment based on FATF criteria, bilateral dialogues, and on-site visits,” the EU stated. “The identified jurisdictions exhibit significant strategic deficiencies in their regimes to counter money laundering and terrorist financing.”
In contrast, Uganda, along with Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and the United Arab Emirates, was removed from the grey list after demonstrating notable improvements in financial oversight and compliance with international AML standards.
Kenya was initially grey-listed in 2024 for its failure to secure convictions in money laundering and terror financing cases. The absence of legal provisions covering virtual assets, non-profit organisations, and the lack of a structured, risk-based supervisory system further contributed to its inclusion.
In 2023, the United States raised concerns over Kenya’s financial practices. During a July visit, U.S. Undersecretary for Terrorism and Financial Intelligence, Brian Nelson, met with President William Ruto and cautioned against Kenya’s engagement with countries such as Iran and Belarus, which are under U.S. sanctions.
“If Kenya considers itself a U.S. ally, alignment with our policies is expected,” Nelson said at the time, referencing controversial visits between Kenyan and Iranian and Belarusian officials.
Following this diplomatic pressure, President Ruto established the Anti-Money Laundering and Combating Terrorism Financing Multi-Agency Team (AML/CFT MAT). The inter-agency task force includes the FRC, the Central Bank of Kenya, the Kenya Revenue Authority, the Directorate of Criminal Investigations, and the Ethics and Anti-Corruption Commission.
Further reforms included amendments to the Proceeds of Crime and Anti-Money Laundering Act, aimed at enhancing asset tracing capabilities, tightening reporting obligations, and increasing penalties for non-compliance.
Yet despite these measures, Kenya’s position on the grey list remains unchanged. Speaking at a recent workshop hosted by the Kenya School of Government, DCI Director of Investigations Abdalla Komesha acknowledged the evolving nature of financial crimes.
“Proceeds of crime are no longer stashed under mattresses,” Komesha noted. “They are laundered through complex structures, layered in global accounts, and masked in real estate and cryptocurrencies.”
Analysts argue that corruption and political interference remain critical obstacles to Kenya’s removal from the list. Public outcry has also intensified around untraceable wealth being displayed by political figures, despite cuts to public services. Kirinyaga Woman Representative, Njeri Maina, recently criticised the lavish donations made by politicians while sectors like education face chronic underfunding.
“We see donations exceeding Ksh145 million ($1.12 million), yet we’re told there’s no money for free education or youth employment initiatives,” she said.
While Kenya continues efforts to strengthen its financial integrity systems, the EU grey listing underscores the urgency of sustained, verifiable action, particularly in prosecuting financial crimes and strengthening regulatory oversight.
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