- The EU adds Kenya to its high-risk list due to weaknesses in anti-money laundering and terrorism financing.
- The move follows FATF’s earlier decision to grey-list the country.
- Ten other countries were also flagged in the update.
- Kenya now faces tighter financial scrutiny from global partners.
- Businesses may experience more checks and hurdles in cross-border transactions.
- The EU calls for urgent reforms to restore trust in Kenya’s financial systems.
- The regulation may come into force within a month, unless it is stopped by EU lawmakers.
Kenya’s standing in the global financial space has taken a blow after the European Commission listed the country among high-risk states with serious gaps in fighting money laundering and terrorism financing. This decision is tied to earlier action by the Financial Action Task Force (FATF), which placed Kenya under increased monitoring last year.
The country now joins ten others flagged for posing threats to the safety and integrity of the EU financial system, including Algeria, Angola, Lebanon, and Venezuela.
EU’s Decision Based on FATF Report and Technical Review
In a statement, the Commission explained that the update reflects findings from FATF’s grey list and its ongoing effort to uphold global financial standards. The assessment used multiple sources, including on-site inspections, bilateral talks, and technical evaluations.
“As part of our commitment to international standards, we aligned this list with FATF’s report and conducted a thorough review,” the Commission noted.
Businesses to Face More Scrutiny and Regulations
With Kenya now under stricter watch, banks and companies operating in or with Kenya should expect more complex compliance procedures. There will likely be increased checks on transactions, which could slow down international dealings and raise costs for cross-border trade and investment.
Pressure Mounts for Reforms
This development sounds alarm bells for Kenya’s financial sector, especially at a time when the country seeks to boost investor trust and fight off transnational financial crimes. The EU’s decision also highlights how gaps in regulation can damage confidence in Kenya’s banking and investment environment.
Mixed Signals: Others Removed as Kenya Is Added
While Kenya has been added to the list, some countries such as the UAE, Senegal, and the Philippines have been removed, after showing progress in cleaning up their systems. For Kenya, the inclusion means a clear call for reform and quicker action on enforcement.
What’s Next? One Month Countdown Begins
The updated list is part of a delegated EU regulation and will officially take effect within one month—unless the European Parliament or Council raises objections before then. Meanwhile, the Commission says it will keep monitoring Kenya’s progress and provide support where needed to help implement FATF’s recommended reforms.
