CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
ANTI-MONEY LAUNDERING (AML) ROUNDTABLE
Intercontinental Hotel
Tuesday, October 28, 2014

Mr. David Drinkard, Deputy Economic Counselor, US Embassy
Nairobi;
Our Development Partners;
Private Sector Representatives;
Representatives of Government Agencies here present;
Distinguished Ladies and Gentlemen:
I feel honoured and privileged to be with you at this important
interactive forum that brings together our development
partners, private sector players and Government agencies to
deliberate on the important subject of Anti-Money Laundering
and Combating the Financing of Terrorism (AML/CFT).
Ladies and Gentlemen; as you are aware, Kenya’s AML/CFT
regime since June 2009 had been under review by the
International Cooperation Review Group (ICRG). Kenya was
initially referred to the ICRG for being a high risk jurisdiction
that had significant deficiencies in the AML/CFT regime but
had also significant exposure due to its porous borders. Kenya’s
engagement with the ICRG was facilitated through regular
meetings with the Middle East/Africa Regional Review Group
(RRG).

Ladies and Gentlemen; as you may also recall, Kenya
underwent an on-site visit in May 2014 by the ICRG Regional
Review Group. The visit which entailed meetings with various
key policy makers and practitioners involved in AML/CFT both
in the public and private sector formed the basis on which
Kenya was removed from the Financial Action Task Force
(FATF) monitoring process during the FATF plenary meeting of
June 2014. I want to extend my personal appreciation to all of
you for the joint efforts that went a long way in addressing the
deficiencies that led Kenya to being put under the review
process.
Ladies and Gentlemen; being put under the FATF process might
have appeared punitive. However, it is in Kenya’s global
interest to put in place appropriate measures to detect and deter
money laundering and terrorism financing risks. To be
upgraded from the dark grey list, required Kenya to have an
AML/CFT legal and regulatory framework that is aligned to the
FATF standards. We now have the framework and the question
that one may ask is whether we have arrived at the ultimate
destination. My emphatic answer to the question is that we
have not arrived at our destination but have only begun the
journey. We must now focus on the effectiveness of Kenya’s

AML/CFT framework – This is institutional capacity for
effective AML/CFT Regime.
Ladies and Gentlemen; The Eastern and Southern Africa AntiMoney Laundering Group (ESAAMLG) will be conducting the
second round of Mutual Evaluations on AML/CFT from 2015
based on new a methodology. The scope of the evaluations will
be based on two inter-related components for technical
compliance and effectiveness. Technical compliance will center
on assessing whether necessary laws, regulations or other
required measures are in force and effective, and whether the
supporting AML/CFT institutional framework is in place. The
effectiveness component seeks to assess the adequacy of the
implementation of the FATF recommendations, and identifies
the extent to which a country achieves a defined set of
outcomes that are central to a robust AML/CFT system.
Therefore the task ahead of us now is the implementation of
the AML/CFT legal and regulatory framework. This roundtable
is thus important to devise methods and allocate resources so
that by the time the second round of Mutual Evaluations is
being conducted on Kenya, the AML/CFT regime will be found
to be effective.

Ladies and Gentlemen; The revised FATF recommendations
issued in February 2012, recommend that jurisdictions adopt
the risk based approach to implementing AML/CFT measures.
These require countries to identify, assess and understand
money laundering and terrorism financing risks facing them
and appropriately allocate available resources to mitigate
money laundering and terrorism financing vulnerabilities. As
a preliminary step, jurisdictions have to conduct a National
Risk Assessment (NRA) on AML/CFT. It is now time to fast track
Kenya’s AML/CFT NRA.
The NRA will involve sensitization of players, data collection,
analysis of the data collected and reporting of the findings to
the stakeholders and Kenya as a whole. The process requires
both financial and human resources. We have already
commenced this process and I therefore call upon our
development partners to continue providing the required
technical support to ensure that this noble exercise is
completed within a reasonable period.
Ladies and Gentlemen; the fight against money laundering and
terrorism financing requires concerted efforts of the
Government, private sector and our development partners. I
therefore note with pleasure your commitment to this

worthwhile cause. It is my hope that deliberations on this
subject will contribute to the realization of an effective
AML/CFT regime.
Finally, in spite of the fact that we have come out of the ICRG
process, we need to appreciate that various players are at
different stages of implementation of the AML/CFT framework. I
therefore want to emphasise the need for continuous capacity
building initiatives targeted at law enforcement agencies, the
judiciary, the financial sector fraternity and the financial
sector regulators coordinated by FRC.
Ladies and Gentlemen; with these thoughts, let me wish you
fruitful deliberations and I look forward to the agreed action
plans and outcomes.
Thank you