President William Ruto on Wednesday assented to the Conflict of Interest Bill marking a pivotal step in strengthening Kenya’s governance framework and supporting its efforts to exit the Financial Action Task Force (FATF) grey list.
The new law consolidates laws on conflict of interest, enhancing transparency and accountability in public service, a critical component in addressing deficiencies identified by the FATF.
On April 17, Ruto declined to assent to the Conflict of Interest Bill, 2025, returning it to Parliament on April 28 with a detailed memorandum outlining critical amendments.
The President argued that the Bill sent to him fell short of establishing a comprehensive and enforceable system, citing loopholes that could undermine public integrity.
Exercising his veto powers under Article 115 of the Constitution, President Ruto’s referral emphasised the need for a more robust framework to prevent public officers from exploiting their positions for personal gain.
His recommendations focused on tightening definitions, clarifying administrative roles, expanding oversight powers, and closing gaps that allow conflicts to persist through proxies or subjective exemptions.
After President William Ruto referred the Bill back with reservations, both houses incorporated his recommendations, with the National Assembly passing the revised Bill on June 3, 2025, and the Senate on July 23, 2025. This collaborative process underscores Kenya’s commitment to robust legislation.
Exiting FATF Grey Listing
Kenya’s placement on the FATF grey list in February 2024 highlighted deficiencies in its anti-money laundering and counter-terrorism financing (AML/CFT) regime, including weak oversight of public officials’ conduct.
The Conflict of Interest Act directly addresses these concerns by consolidating conflict of interest laws under the Ethics and Anti-Corruption Commission (EACC), as mandated by Article 79 of the Constitution.
By establishing a clear framework to manage conflicts of interest, the new law enhances public sector integrity, a key factor in demonstrating to the FATF Kenya’s commitment to transparency and accountability.
Key provisions prohibit public officers from granting preferential treatment beyond legal or policy limits, being influenced by external employment offers, or entering contracts with their reporting entities for goods and services.
The law also bars public officers from acquiring interests in entities contracted by their organisations and restricts incompatible gainful employment. These measures aim to curb illicit financial flows and abuse of power, aligning with FATF’s expectations for stronger governance controls.
Enhanced Compliance and Wealth Declarations
To ensure compliance, the new law mandates recusal from decisions involving conflicts of interest and requires public officers to declare their income, assets, and liabilities, including those of their spouses and dependent children, biennially.
Expanding on the repealed Public Officer Ethics Act, it now covers additional categories such as the Chief Justice, Cabinet members, and County Assembly members.
Supervised by the EACC, these wealth declarations are crucial for detecting illicit enrichment, a priority for FATF compliance, as they strengthen oversight of public officers’ financial activities.
The new law introduces clear procedures for lodging complaints with the EACC or reporting authorities, preventing concurrent investigations and mandating a 90-day resolution timeline.
This ensures efficient handling of conflict of interest violations, addressing FATF concerns about timely enforcement in Kenya’s AML/CFT framework. By streamlining investigations, the Bill enhances the EACC’s ability to act decisively, reinforcing Kenya’s case for removal from the grey list.
Kenya’s grey listing has increased scrutiny on its financial systems, impacting investor confidence and access to international markets.
In June, the European Commission has updated its list of high-risk third-country jurisdictions, adding Kenya alongside nations like Algeria, Angola, and Venezuela.
The designation, driven by strategic deficiencies in Kenya’s anti-money laundering (AML) and counter-terrorism financing (CTF) regimes, marked a critical juncture for a nation long seen as East Africa’s economic powerhouse.
However, the enactment of the Conflict of Interest Act is a step towards undoing this but effective implementation is critical. The EACC must be adequately resourced to enforce the Bill and monitor compliance.
Public awareness campaigns will also be essential to ensure stakeholders understand their roles in upholding the new framework. Failure to implement could prolong Kenya’s grey list status, with economic repercussions.
