Kenya Ramps Up Reforms to Exit FATF Grey List

Kenya has stepped up efforts to overhaul its anti-money laundering and counter-terrorism financing (AML/CFT) regime in a bid to exit the Financial Action Task Force (FATF) grey list, Treasury Principal Secretary Dr Chris Kiptoo has announced. 

The accelerated reforms come amid intensifying domestic and international pressure over long-standing compliance gaps that have clouded investor confidence and raised the cost of doing business in the country. 

In a statement, Dr Kiptoo said the government met in Nairobi with heads of AML/CFT implementing agencies to review progress under the International Cooperation Review Group process and agree on next steps toward exiting the grey list.

 The principal secretary highlighted key legislative and regulatory milestones, including the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2025 and the Virtual Asset Service Providers (VASPs) Act, 2025.

 These measures, he said, are designed to “strengthen institutional coordination, enhance risk-based customer due diligence, improve suspicious transaction reporting, and closer inter-agency collaboration across critical sectors.”

Kenya’s grey-listing by the Paris-based FATF in February 2024 followed a mutual evaluation that identified strategic deficiencies in the country’s AML/CFT framework, including weak supervision of non-financial sectors and inadequate prosecution of financial crime offences. 

 That designation triggered heightened monitoring and contributed to the European Union adding Kenya to its own list of high-risk third countries for anti-money laundering shortcomings. 

The reforms spearheaded in the past two years have included wide-ranging legislative changes. President William Ruto assented to the AML/CFT Amendment Act in June 2025, strengthening the legal foundation for risk-based supervision of sectors such as SACCOs, NGOs and virtual asset businesses. 

 The VASPs Act operational from November 2025 provides for licensing and regulation of cryptocurrency exchanges and digital asset service providers, closing a regulatory void that had left Kenya exposed to emerging financial crime risks. 

Despite progress, Kenya has yet to satisfy all of FATF’s action items. According toPS Kiptoo , the country has completed around 10 of the 21 tasks required for grey-list removal, with tight deadlines looming for outstanding areas such as enhancing investigations, prosecutions and enforcement. 

 “We are taking decisive actions to complete the remaining reforms and secure Kenya’s exit from the Financial Action Task Force (FATF) Grey List,” Dr Kiptoo said in his statement, adding that the government remains committed to restoring full international confidence in Kenya’s financial system.