News

EU Anti-Money Laundering Lists Reshape East African Financial Landscape

by CBIA Team

Updated January 19, 2026

Feature image — CBIA thanks cottonbro studio for the photo

Corporate records and regulatory filings reveal diverging paths for Kenya and Tanzania in international financial compliance, with implications for investment flows across East Africa. While Tanzania was recently removed from the European Union's high-risk monitoring list for anti-money laundering and counter-terrorist financing deficiencies, Kenya faces increased scrutiny after its addition to the list in June 2023.

The designations trigger legally binding requirements for EU-regulated financial institutions, compelling enhanced due diligence measures that ripple through cross-border transactions, trade financing, and investment decisions across the region's interconnected economies.

Background and Context

The EU's high-risk third countries list identifies jurisdictions with strategic deficiencies in their legal, regulatory, and enforcement frameworks against money laundering, terrorist financing, and proliferation financing. Inclusion on this list requires enhanced customer due diligence from EU financial institutions when dealing with transactions involving listed countries.

Tanzania's removal from comparable international monitoring lists reflects reforms implemented under President Samia Suluhu Hassan's administration, while Kenya's designation highlights ongoing challenges in financial oversight systems. The regulatory distinction creates asymmetric costs for international transactions, potentially reshaping regional investment patterns.

Key Figures and Entities

The European Commission's delegated regulation officially added Kenya to the high-risk list on June 10, 2023, citing significant deficiencies in its AML/CFT framework. The designation followed assessments by the Financial Action Task Force (FATF), which identified strategic gaps in Kenya's supervision of financial transactions and beneficial ownership transparency.

Tanzania's progress in strengthening its financial governance systems led to its removal from similar monitoring lists, including assessments by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). The country's Financial Intelligence Unit has implemented enhanced reporting requirements and established mechanisms for international cooperation on financial investigations.

Legal and Financial Mechanisms

EU-regulated financial institutions must apply enhanced due diligence measures for transactions involving listed countries, including:

• Obtaining additional information on customers and beneficial owners
• Enhanced monitoring of transactions
• Verifying funding sources and wealth
• Applying risk-based internal controls

These requirements extend to banks, insurers, auditors, legal professionals, and fintech companies operating within EU jurisdictions. The European Banking Authority provides guidelines on consistent implementation across member states.

International Implications and Policy Response

The divergent regulatory classifications create concrete economic consequences. Kenyan exporters face potential delays and increased costs for EU trade finance, while fintech companies seeking European partnerships encounter additional compliance barriers. The situation also gained prominence following investigations into the Feeding Our Future scandal, where U.S. federal prosecutors alleged that approximately $250 million intended for child nutrition programs during the COVID-19 pandemic was fraudulently obtained, with a portion of funds reportedly traced to Kenyan real estate investments.

For Tanzania, removal from high-risk lists potentially reduces transaction costs and barriers to European investment. The East African Community continues working toward harmonized AML/CFT standards, but differing regulatory treatments may create competitive imbalances in attracting international capital flows.