Introduction

The East African business landscape is constantly evolving, driven by various regulatory and legal developments. Businesses operating in this region must stay abreast of these changes to ensure compliance and leverage new opportunities. This article highlights some of the key regulatory developments that have impacted East African businesses in 2024.

1. New Corporate Governance Regulations in Kenya

Kenya has introduced new corporate governance regulations aimed at enhancing transparency and accountability in the corporate sector. These regulations, which came into effect in early 2024, require companies to:

Key Requirements:

  • Strengthen Board Oversight: Boards are now expected to play a more active role in overseeing company operations, risk management, and strategic planning.
  • Improve Disclosure Requirements: Companies are mandated to provide more detailed and timely disclosures regarding their financial performance, governance practices, and beneficial ownership.
  • Promote Ethical Conduct: The regulations emphasize the importance of ethical leadership and corporate social responsibility, encouraging companies to adopt robust ethics policies and codes of conduct.

These changes are expected to foster a more robust and ethical business environment in Kenya, attracting more foreign investment and promoting sustainable growth.

2. Adopting Anti-Money Laundering Policies and Procedures

East African countries have continued to strengthen their anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks in line with international standards. In 2024, several countries in the region, including Uganda and Tanzania, have:

Updated AML/CTF Laws

New amendments to existing AML/CTF laws have been introduced to broaden the scope of regulated entities and enhance penalties for non-compliance.

Increased Enforcement

Regulatory bodies have intensified their efforts to enforce AML/CTF regulations, leading to increased scrutiny of financial transactions.

Technology Adoption

Businesses are encouraged to adopt technology-driven solutions, such as artificial intelligence and blockchain, to enhance compliance efforts.

These measures are crucial for combating illicit financial flows and safeguarding the integrity of the East African financial system.

3. Enhanced Beneficial Ownership Disclosure

Transparency in beneficial ownership has become a global priority, and East African countries are no exception. In 2024, there has been a concerted effort to enhance beneficial ownership disclosure requirements across the region.

Centralized Registers

Several countries are establishing centralized registers for beneficial ownership information, making it easier for authorities to identify the ultimate owners of companies.

Increased Due Diligence

Financial institutions and other regulated entities are required to conduct enhanced due diligence to identify and verify the beneficial owners of their clients.

Cross-Border Cooperation

East African countries are collaborating more closely to share beneficial ownership information and combat cross-border illicit financial activities.

These measures are vital for preventing corruption, tax evasion, and other financial crimes, promoting a more transparent and accountable business environment.

Conclusion

The regulatory landscape in East Africa is dynamic, with ongoing efforts to strengthen legal frameworks and promote good governance. Businesses operating in the region must proactively adapt to these changes to ensure compliance, mitigate risks, and capitalize on emerging opportunities. Staying informed and seeking expert legal advice is essential for navigating this evolving environment and achieving sustainable success.