KENYA Trends and Developments Contributed by: Sammy Ndolo, Brian Muchiri, Nicholas Owino and Valere Nyaboke, Cliffe Dekker Hofmeyr
the UN Guiding Principles on Business and Human Rights and responds to heightened scrutiny of corpo - rate conduct beyond shareholder returns. Transparency, Disclosure and Integrated Reporting Transparency and disclosure standards have contin - ued to strengthen, with the “Transparency and Disclo - sure” principle achieving a 77.73% leadership rating. Improvements are underpinned by: • greater publication of governance policies, board charters and board decisions; • more robust disclosure of related–party transac - tions and remuneration structures; and • increased use of digital platforms to improve the accessibility and timeliness of information. Regulatory direction and market expectations are increasingly converging towards integrated report - ing, in which financial, governance, sustainability and strategic disclosures together articulate a coherent narrative of long–term value creation. Strengthening Anti-Money Laundering and Beneficial Ownership Regimes Legislative reforms: The Anti Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2025 The prevention of money laundering and terrorist financing has been a key priority for the Kenyan gov - ernment. Kenya’s AML framework is aligned with inter - national standards established by the Financial Action Task Force (“FATF”) and as a member of the Eastern and Southern Africa Anti-Money Laundering Group, Kenya has incorporated these standards into domes - tic law through the Proceeds of Crime and Anti-Money Laundering Act (“POCAMLA”) and its subsidiary legis - lation. The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, enacted in June 2025, significantly strengthened Kenya’s regu - latory framework by amending ten Acts of Parliament and expanding the scope of AML oversight to tradi - tionally non-financial sectors, such as real estate, legal and accounting services, which have historically been vulnerable to illicit financial flows. “Reporting institutions” under POCAMLA, including financial institutions and designated non-financial
businesses and professions such as real estate agen - cies, dealers in precious metals and stones, account - ants and advocates, are subject to comprehensive AML compliance obligations. These include: • monitoring and reporting of suspicious transac - tions to the Financial Reporting Centre within two days after a suspicion arises; • customer due diligence; • identification and verification of beneficial owners; and • maintenance of customer and transaction records for at least ten years. Boards of reporting institutions are responsible for ensuring compliance, including approving AML poli - cies and risk frameworks and ensuring adequate resourcing for compliance functions. Enhanced enforcement and compliance mechanisms The Registrar of Companies has intensified compli - ance audits and imposed penalties for non-disclosure of beneficial ownership information. The threshold for beneficial ownership disclosure remains at 10% of issued shares or voting rights, but recent amendments have closed loopholes by requiring the disclosure of nominee shareholders and partners. In line with these enforcement powers, the Business Registration Ser - vice issued a compliance notice on 11 April 2025 to private companies that have not filed their registers of beneficial owners, warning that non-compliant com - panies may be presumed inactive or not operating, which could result in their removal from the official register of companies. The Banking Act has been amended to include benefi - cial ownership in defining “significant shareholders.” This change means that the Central Bank of Kenya (“CBK”) must vet individuals identified as beneficial owners before they can be appointed as significant shareholders in banking institutions. This requirement aligns with CBK Prudential Guidelines on Corporate Governance for banking institutions and is intended to ensure that only individuals with clean records and no connections to illicit activities are involved in the own - ership and management of banks. Where an offence under POCAMLA is committed by a body corporate
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