Ruto Signs Anti-Money Laundering Bill, Spelling Doom for Criminals

President William Ruto has signed sweeping anti-money laundering legislation into law, significantly tightening Kenya’s financial regulatory framework and imposing harsher penalties on those involved in illicit financial activities.

President William Ruto on Tuesday, June 17, 2025, assented to the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2023 at State House, Nairobi, marking a decisive step in Kenya’s fight against financial crimes and its bid to restore international confidence in the country’s banking sector.

The new legislation comes at a critical time for Kenya, which was placed on the FATF grey list in February 2024, triggering concerns over the country’s financial reputation and its ability to attract foreign investment.

The grey listing by the Financial Action Task Force (FATF) had raised alarm bells about Kenya’s ability to combat money laundering and terrorism financing effectively.

The law introduces comprehensive reforms that significantly expand the scope of anti-money laundering oversight.

Key provisions include enhanced regulatory oversight of financial institutions, expanded reporting requirements for unusual transactions, and strengthened penalties for non-compliance.

“The signing of the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2025, reinforces this vision by sealing gaps that facilitate illicit financial flows via property transactions and the use of shell companies,” President Ruto stated on his X platform following the signing ceremony.

The legislation places several sectors under closer scrutiny, including betting firms, landlords, retirement benefit schemes, SACCOs, estate agents, certified public secretaries, jewel dealers, accountants, and NGO managers.

These entities will now be required to comply with stringent financial reporting standards and face severe penalties for non-compliance.

Enhanced Powers for Financial Reporting Centre

One of the most significant aspects of the new law is the enhanced mandate given to the Financial Reporting Centre (FRC).

The FRC is an independent body whose principal objective is to assist in the identification of the proceeds of crime and combating money laundering, terrorism financing and proliferation financing.

The legislation grants the FRC operational independence by excluding it from the definition of State Corporation, allowing it to operate with greater autonomy in its fight against financial crimes.

The law also improves collaboration between agencies in detecting suspicious financial activity and sets out clearer mechanisms for the recovery of assets suspected to be proceeds of crime.

## Parliamentary Back-and-Forth

The journey to enactment was not without challenges. Initially passed by Parliament in April 2025, the Bill was returned by President Ruto with proposed amendments for stricter provisions in certain clauses. The President raised particular concerns with Clause 3(2), which sought to limit the tenure of the Financial Reporting Centre’s principal officeholder to a non-renewable six-year term.

Ruto argued that this provision conflicted with the constitutional framework governing independent officeholders, noting that the proposed tenure arrangement could potentially extend to 10 years, exceeding the constitutional cap of eight years.

His recommended transitional clause ensures that any officeholder appointed under existing provisions would serve under the terms in place at the time of their appointment.

Urgent Economic Imperative

During parliamentary debates, National Assembly Majority Leader Kimani Ichung’wah highlighted the urgency of the legislation, warning that failure to act decisively could lead to continued international scrutiny and potential financial isolation.

“Kenya is currently on the FATF grey list. If we don’t act fast, the country risks serious and long-term economic consequences,” lawmakers emphasized during the approval process.

The legislation aligns Kenya’s legal structure with global standards on financial transparency and terrorism financing, bringing the country in line with recommendations from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which has been working closely with Kenyan authorities to implement necessary reforms.

Implications for Kenya’s Economy

The new law is expected to restore investor confidence and achieve greater economic stability by demonstrating Kenya’s commitment to international financial standards.

Money laundering and illicit financial flows have long been blamed for eroding public trust, fuelling corruption, and facilitating organized crime in the country.

The legislation also enhances the powers of the Capital Markets Authority and allows for the surrendering of fugitive criminals who consent to be extradited to requesting states, strengthening Kenya’s international cooperation in fighting financial crimes.

The timing of this legislation is particularly significant given recent developments. Kenya recently faced additional scrutiny when the European Union added the country to its money laundering watchlist, compounding pressure from the FATF grey listing.

This dual listing has intensified the urgency for Kenya to demonstrate concrete progress in combating financial crimes.

The new anti-money laundering framework represents a comprehensive response to these international concerns and signals Kenya’s determination to clean up its financial sector.

With enhanced penalties, broader oversight, and stronger institutional frameworks now in place, criminals involved in money laundering and terrorism financing face an increasingly hostile operating environment.

As Kenya implements these new measures, the focus will shift to enforcement and ensuring that the enhanced legal framework translates into effective action against financial crimes.

The success of this legislation will ultimately be measured by Kenya’s ability to demonstrate tangible progress in combating illicit financial flows and securing its removal from international watchlists.