. the onsite team observed that kenya had a clear commitment at both the political and technical levels to continue the development of its aml / cft regime and there was an adequate institutional framework to pursue the reforms going forward. ladies and gentlemen ; it is on the basis of the on - site visit report that the fatf concluded that kenya has established the legal and regulatory framework to address the strategic deficiencies that had been identified. in view of these positive developments, kenya was subsequently removed from the fatf ’ s monitoring process under its on - going global aml / cft compliance process. however, kenya will continue addressing and improving on its aml / cft regime under the eastern and southern africa anti - money laundering group ( esaamlg ). ladies and gentlemen : on its part, the central bank has continually enhanced the regulation and supervision of the financial system in order to improve the sector ’ s integrity. as part of our efforts in ensuring appropriate and effective oversight, the central bank first issued aml guidelines in 1996. these guidelines were revised in 2000, 2006 and bis central bankers ’ speeches subsequently overhauled in 2012 to reflect the prevailing international best practice and to align them with the proceeds of crime and anti - money laundering act, 2009 ( pocamla ). ladies and gentlemen ; in 2013, frc entered into memorandum of understanding ( mou ) with the respective domestic financial sector regulators comprising the central bank of kenya, capital markets authority, insurance regulatory authority and the retirement benefits authority. the mou provides for supervision and enforcement of pocamla by the supervisors with respect to institutions under their purview. the mou also provides for the exchange of information that is necessary to support effective anti - money laundering supervision of financial institutions. ladies and gentlemen ; money laundering and terrorism financing have far reaching implications on the credibility and stability of the financial system as well as to national security. i therefore applaud bdo and its partner 3i infotech for their pro - activeness in developing aml / cft solutions. these solutions and others in the market will facilitate financial institutions in meeting their aml / cft legal and regulatory requirements effectively and efficiently. this will in turn foster the integrity of kenya ’ s financial sector putting it in good standing globally. with those few remarks i wish you fruitful deliberations. thank you. bis central bankers ’ speeches

close collaboration with the financial reporting centre ( frc ) – kenya ’ s financial intelligence unit ( fiu ) – to foster a culture of compliance in the banking sector. emphasis has been placed on the preventive measures outlined in the proceeds of crime and anti - money laundering act ( pocamla ), kenya ’ s primary anti - money laundering legislation. • provided additional clarity on reporting obligations under pocamla including the issuance of guidelines on large transactions in january 2016, intended to provide a clear trail of large cash transactions conducted over the counter in banks. • enhanced aml / cft on - site inspections. cbk is currently developing a risk based aml / cft supervisory framework with assistance from the international monetary fund ( imf ). • required greater transparency on the part of banks to ensure public confidence. transparency extends to disclosures by banks on their corporate governance and risk management structures. in this regard, cbk has enhanced the disclosures by banks on their significant shareholders. banks are now required to disclose on their websites details of significant shareholders who own 5percentor more shareholding. let me take the few remaining minutes to share with you some of our key lessons relating to money laundering, particularly with respect to illicit financial flows : i ) kenya ’ s financial sector is very vulnerable given its strategic position in the region, facilitated by easy access through sea ports, airports and land. kenya is a fast growing economy with high potential especially in the financial sector. it is therefore attractive to both well - intentioned and ill - intentioned investors. ii ) inter - agency cooperation between the financial sector regulators, law enforcement agencies and the financial institutions has had a positive effect in stemming illicit financial flows. iii ) the perpetrators of money laundering are very smart and sophisticated, ready to take advantage of any existing loopholes in the law and weaknesses in the internal controls of financial institutions. iv ) regular interaction with international bodies tasked with the responsibility of preventing money laundering is key in shaping or improving a country ’ s institutional, legal and regulatory framework in combating illicit financial flows. in conclusion, the battle against illicit financial flows in africa cannot be won singlehandedly. governments, legislatures, the judiciary and the private sector must come together. tackling the underlying sources of illicit financial flows is imperative. for the african financial sector, investment must be made in strengthening preventive measures. surveillance, detection and recovery procedures must be enhanced. with this comprehensive approach, africa will be well armed to combat the sc