Written by: Financial Mind Blog Team
7 March 2024
Kenya and Namibia have been placed on the Financial Action Task Force's (FATF) grey list due to shortcomings in their legal frameworks concerning money laundering and terrorism financing. This inclusion, announced at the FATF's Paris meeting on February 23, subjects both nations to heightened scrutiny as they work to rectify identified strategic deficiencies in combating financial crimes. Being greylisted means these countries have committed to collaborating with the FATF to enhance their anti-money laundering (AML) and counter-terrorism financing (CTF) measures within agreed deadlines.
Kenya faces the challenge of addressing eight specific targets to be removed from the grey list. These include updating its risk assessments and AML/CTF strategies, improving preventive measures within financial and non-financial sectors, and enhancing its financial intelligence capabilities. The country's vulnerabilities, as highlighted in a 2022 FATF report, include being a transit point for illegal drug and wildlife trafficking and its exposure to terrorism financing risks due to proximity to terrorist-active regions.
Namibia, similarly tasked with eight objectives, is focusing on strengthening its AML/CTF supervision, boosting the resources and training of its Financial Intelligence Centre, and enhancing law enforcement's ability to investigate and prosecute financial crimes. Notable risks identified for Namibia include increased instances of fraud, corruption, and wildlife crimes, often facilitated by collusion between government officials and the private sector. The country has also been criticized for inadequately addressing terrorism financing risks and downplaying the threat level.
Both countries' inclusion on the grey list reflects broader FATF efforts to improve global financial integrity by encouraging nations to close gaps in their AML/CTF frameworks. This development follows the mutual evaluations revealing Kenya and Namibia's moderate effectiveness in implementing robust financial crime measures, despite progress in certain areas. Meanwhile, the FATF's recent updates also noted the removal of countries like Barbados, Gibraltar, Uganda, and the United Arab Emirates from the grey list, recognizing their compliance improvements.
Knowledge base:
What is the FATF?
The Financial Action Task Force (FATF) is an intergovernmental body founded in 1989 to combat money laundering and terrorist financing. It sets global standards to prevent illegal financial activities and ensure the integrity of the international financial system. The FATF assesses member countries' compliance with its standards, with non-compliant ones facing potential listing on its grey or black lists, signaling varying levels of concern. More about FATF can be found here.
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