The International Monetary Fund (IMF) will vet a proposal by the Kenyan government to relax the checks on large cash transactions by financial institutions to ensure it does not increase the risk of money laundering.

Kenya’s Cabinet approved a proposal to increase Kenya’s cash disclosure threshold by 50% from the current $10,000 to $15,000.

Anti-money laundering and the combating of terrorism financing are key pillars of Kenya’s ongoing programme with the IMF.

“We have just received the Bill and are looking at it and we will be engaging actually through our legal department because this is one of the very important topics,” IMF Mission Chief to Kenya Haimanot Teferra told the Business Daily.

“We will look at the Bill and have a conversation to make sure that Kenya will be able to avoid greylisting,” she said.

The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2023, was approved by a Cabinet meeting chaired by President William Ruto on July 18.

The global money laundering and terrorism financing watchdog, the Financial Action Task Force (FATF), identifies jurisdictions with weak measures to combat money laundering and terrorist financing in two documents, the black list and the grey list, that are issued three times a year.

The blacklist has countries at high risk of money laundering and terrorism financing. As of the latest assessment in June 2023, it had North Korea, Iran and Myanmar.

The grey list has 26 countries, including Nigeria and South Africa.

The IMF - which approved almost $1 billion for Kenya to help its economy this month - has urged the government to address gaps in the legal framework and add measures to improve anti-money laundering supervision.

Teferra said that the fund will engage with the government to ensure that the proposed change of threshold in large transactions does not hurt Kenya’s standing on anti-money laundering.

(Editing by Brinda Darasha;