Grey List Exit: Kenya Targets April 2027 After Clearing 19 of 21 FATF Action ItemsGrey List Exit: Kenya Targets April 2027 After Clearing 19 of 21 FATF Action Items
Key Highlights
- Kenya has addressed 19 of the 21 action items required to leave the Financial Action Task Force grey list and is aiming to exit by April 2027.
- Six items were addressed in the two and a half months before a 13 October hearing, Financial Reporting Centre Director-General Naphtaly Kipchirchir Rono told MPs.
- The two remaining items were not named, and MPs questioned whether exemptions to asset freezes under new terrorism regulations could create loopholes.
Kenya has addressed 19 of the 21 action items required to leave the Financial Action Task Force (FATF) grey list and is aiming to exit by April 2027, the Financial Reporting Centre told MPs on 13 October 2026.
The target matters for banks, remittance firms and businesses that face extra scrutiny while the country remains under increased monitoring. Financial Reporting Centre Director-General Naphtaly Kipchirchir Rono told the National Assembly Committee on Delegated Legislation: "We have now addressed 19 action items out of the 21 action items."
What the committee heard
Rono said Kenya is "in a fairly good place" and expressed optimism about meeting the April timeline with support from Parliament and stakeholders. Six of the 19 items were addressed in the two and a half months before the hearing.
The session, chaired by Ainabkoi MP Samuel Chepkonga, examined the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on the Suppression of Terrorism) Regulations, 2026. The regulations provide for freezing the assets of designated individuals and entities suspected of terrorism, and set out when access to frozen funds may be permitted.
Under the rules, funds can be released only after a committee order. Rono said the exemptions cover medical reasons, basic expenses and humanitarian grounds. James Manyonge, the centre's director of external relations, said applicants must prove their need for funds and that access is not automatic.
Kilgoris MP Julius Sunkuli asked whether the exemptions could create loopholes that undermine national security.
What remains unresolved
The report does not identify the two outstanding action items, and Mwenendo has not seen the timetable for the FATF plenary meetings at which a removal decision would be taken. Exit from the list depends on the global body's own assessment, not on the number of items a country reports as complete.
Centre leaders said complementary proliferation financing regulations would be presented to Parliament the following week. They also said consistent implementation by banks of recent changes to cash withdrawal thresholds will need further guidance from the Central Bank of Kenya.
Committee members called for joint technical workshops and benchmarking exercises involving Parliament and regulatory agencies.
Why the banking sector is watching
As Mwenendo earlier reported, Kenyan banks' bad loans fell to 13.9% in September, a sign that the sector is in better health as compliance expectations rise. The grey list is a measure of how well a country's rules on money laundering and terrorism financing work in practice, which is why lenders and regulators follow the process closely.
The Central Bank of Kenya also kept its benchmark rate at 8.75% this month, as Mwenendo reported on the October rate decision, so the regulatory agenda sits alongside a cautious monetary stance. Until FATF confirms the two remaining items are complete, April 2027 remains a target rather than a decision.
In Summary
- Who gave the update?
- Financial Reporting Centre Director-General Naphtaly Kipchirchir Rono, to the National Assembly Committee on Delegated Legislation.
- What is the progress?
- Kenya has addressed 19 of 21 FATF action items and targets an exit from the grey list.
- When is the target?
- April 2027; the hearing took place on 13 October 2026.
- Where was it discussed?
- In the National Assembly, during review of new terrorism asset-freeze regulations.
- Why does it matter?
- Grey-listed countries face increased monitoring, which affects banks, remittance firms and businesses.
- How are frozen funds accessed?
- Only after a committee order, on medical, basic expense or humanitarian grounds, with need proven.