Kenya’s new trust law creates another source of ownership data for financial crime investigations

Kenya has brought trusts into a formal beneficial ownership regime, requiring information on the people who ultimately control or benefit from trust structures to be recorded and made available to relevant authorities.

President William Ruto assented to the Trust Administration Bill, 2026 on September 8, completing a legislative reform aimed at closing a gap in Kenya’s anti-money laundering and counter-terrorism financing framework. The law introduces requirements covering trust registration, record-keeping and beneficial ownership, giving authorities a clearer way to establish who sits behind assets held through trusts.

The reform also adds another source of ownership information to Kenya’s financial intelligence system, which already receives transaction reports from banks and other reporting institutions through the Financial Reporting Centre.

Trust ownership enters a formal register

A trust separates legal ownership of an asset from the people who ultimately benefit from or exercise control over it. A settlor transfers assets to trustees, who hold and manage them for beneficiaries under the terms of the trust.

That structure has legitimate uses in areas such as succession and asset management. It can also make ownership relationships difficult for authorities to establish when investigating financial crime, particularly where assets, companies and financial transactions are spread across several legal arrangements.

The new law requires trustees to maintain accurate and up-to-date information on beneficial owners and lodge the relevant register with the Registrar. Trusts established before the law comes into force will have 24 months to comply with the new requirements.

The framework also provides for information on beneficial owners, trustees and assets held or managed through the trust to be available to competent authorities and relevant reporting institutions, including the FRC and designated non-financial businesses and professions.

The operational arrangements, including the commencement date and detailed access provisions, will depend on publication and implementation of the enacted law and its supporting regulations.

The reform addresses a FATF requirement

The legislation comes against the backdrop of Kenya’s continued engagement with the Financial Action Task Force.

Kenya has been under increased monitoring since February 2024 after FATF identified strategic weaknesses in the country’s anti-money laundering and counter-terrorism financing framework. One of the areas requiring action concerns Recommendation 25, which deals with transparency and beneficial ownership of legal arrangements such as trusts.

In its February 2026 update, FATF called on Kenya to designate a competent authority to regulate trusts, maintain accurate and up-to-date beneficial ownership information and introduce effective measures for breaches of transparency requirements.

The Trust Administration Act addresses part of that action plan. Passing the legislation does not, by itself, remove Kenya from FATF increased monitoring. The country must also demonstrate that its wider reforms are operating effectively.

That places implementation alongside legislation in Kenya’s FATF response.

The data could connect ownership to financial activity

The technology implications of the reform sit in the information infrastructure behind the register.

A trust can own property or other assets while the individuals who ultimately benefit from those assets may not appear as the direct legal owners. A beneficial ownership register gives investigators another way to establish those relationships.

The trust-registration infrastructure being developed by the Business Registration Service has been designed to interact with several government institutions, including the FRC, Kenya Revenue Authority, National Transport and Safety Authority, Ministry of Lands and law-enforcement agencies.

That does not mean these databases automatically operate as a single system. It shows the intended direction of the information architecture, with trust records potentially available alongside information on companies, taxation, property, vehicles and financial intelligence.

The register also has clear limits. Recording a beneficial owner does not establish that a transaction is illicit. Investigators still need financial records, transaction histories and other evidence to determine whether an individual or entity has been involved in money laundering, fraud or terrorism financing.

The register can nevertheless provide an ownership link that may otherwise be difficult to establish.

Existing trusts face a compliance period

The law will require existing trusts to bring their records into compliance within 24 months from its commencement.

For trustees, that means identifying the people who fall within the beneficial ownership requirements, maintaining the relevant records and providing information when required by authorised agencies.

The legislation also introduces penalties for non-compliance. Individuals who fail to maintain beneficial ownership records can face fines of up to KSh500,000, while corporate entities can face penalties of up to KSh2 million. Failure to provide information to enforcement agencies carries higher penalties of up to KSh1 million for individuals and KSh3 million for corporate entities.

The final commencement date and implementation requirements should be confirmed once the enacted legislation and supporting regulations are formally published.

The register is one part of a wider AML system

Kenya’s trust reform addresses a specific weakness in how ownership information is recorded and accessed.

The country already collects financial information through the FRC and maintains separate records covering companies, taxation and assets. The trust framework adds another category of legal ownership to that wider information environment.

Its practical value will depend on whether trustees keep accurate records and whether authorised institutions can use the information alongside the financial and asset records already available to them.

That is also the standard against which Kenya’s FATF reforms will be assessed. FATF’s requirements extend beyond passing legislation to the availability of accurate beneficial ownership information and the effectiveness of mechanisms used to enforce transparency requirements.

The Trust Administration Act gives Kenya a statutory framework for collecting that information. Its implementation will determine how effectively the register supports financial intelligence, investigations and Kenya’s wider effort to address the deficiencies identified under FATF’s increased-monitoring process.

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