NAIROBI, Kenya – The European Commission has placed Kenya on its updated list of high-risk jurisdictions with strategic deficiencies in anti-money laundering and counter-terrorism financing regulations—a move that could trigger increased scrutiny of financial transactions involving the country.
Kenya now joins a group of ten countries—including Algeria, Angola, Côte d’Ivoire, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela—that were newly listed this week.
The Commission said these jurisdictions will be subject to “enhanced vigilance” measures within the European Union’s financial system.
The designation marks another blow to Kenya’s global financial reputation, coming just over a year after the Financial Action Task Force (FATF) placed the country on its “grey list” in February 2024.
That listing meant Nairobi had committed to working with the global watchdog to plug gaps in its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) frameworks.
Although not equivalent to sanctions, inclusion on the EU list could complicate international transactions, raise compliance costs for Kenyan financial institutions, and discourage foreign investment.
“The updated list takes into account the work of the FATF, and in particular, its list of ‘Jurisdictions under Increased Monitoring’,” the Commission said in a statement. “Alignment with FATF is important for upholding the EU’s commitment to global standards.”
The EU said it conducted a “thorough technical assessment” of each newly listed country, drawing on data from FATF, bilateral consultations, and field visits.
The Commission’s move is part of its legal mandate under the Fourth Anti-Money Laundering Directive (4AMLD), which requires regular updates to the list of high-risk third-country jurisdictions.
The changes will formally take effect after a one-month review period by the European Parliament and Council.
Mounting Pressure
Kenya’s financial sector has faced mounting pressure to address illicit financial flows, with growing concern over the use of mobile money and real estate for laundering proceeds of crime.
In recent years, authorities have flagged the rise of white-collar crime and transnational money laundering schemes linked to cybercrime, drug trafficking, and corruption.
Earlier this year, the Central Bank of Kenya (CBK) urged banks and fintech firms to tighten customer verification procedures and report suspicious transactions in real-time.
In addition to listing new countries, the EU Commission also delisted eight nations—Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates—citing progress in strengthening their AML/CFT regimes.
Back in Nairobi, lawmakers have been debating new legislation that would impose heavier penalties for money laundering and terror financing.
National Assembly Majority Leader Kimani Ichung’wa recently called for stronger enforcement mechanisms and better coordination among regulators.
