In a bid to combat illicit financial flows, Kenya is set to implement stricter regulations requiring traders in precious metals and stones to report any cash transactions exceeding Sh1.9 million ($15,000). This move is part of amendments to the Proceeds of Crime and Anti-Money Laundering Act, aimed at addressing vulnerabilities in the sector.
The amendment, tabled in the National Assembly by Majority Leader Kimani Ichung’wah, is designed to align Kenya with global anti-money laundering standards and facilitate its removal from the Financial Action Task Force (FATF) grey list. Kenya was placed on this watchlist in February last year due to weak regulations and inadequate supervision of high-value transactions.
Dealers in gold, silver, and diamonds will be required to report large cash transactions to relevant authorities, mirroring measures imposed on banks and other financial institutions. The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2025, was received by the National Assembly on March 4.
The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a FATF subsidiary, found that Kenya’s gold trade remains highly vulnerable to financial crime. The country is a key hub for smuggled gold from the Democratic Republic of Congo (DRC), which is often laundered through Dubai and other global markets. Despite previous warnings, authorities have struggled to curb the trade, contributing to Kenya’s placement on the grey list.
Experts warn that continued monitoring by FATF could deter foreign investment and increase borrowing costs for Kenya. Investors often shy away from grey-listed countries due to heightened financial scrutiny. Additionally, the restrictions threaten the country’s jewelry and precious metals industries, which rely on smooth international transactions.
Authorities are also concerned about the security risks posed by illicit gold trade, which has been linked to funding armed groups in eastern DRC. Illegal mining activities in the region have spilled over into neighboring Rwanda, Uganda, and Kenya, exacerbating regional instability.
To avoid further economic repercussions, Kenya aims to tighten compliance with global anti-money laundering standards. The proposed legislation is expected to enhance oversight and deter the use of gold and other precious metals for illicit transactions.
Industry stakeholders, including miners, brokers, jewelers, and financial institutions, will need to adapt to the new regulations. If successfully implemented, these measures could help Kenya regain international credibility and restore confidence in its financial system.
