Uganda ups efforts to combat money laundering

By Alfred Wandera and Raymond Baguma

UGANDA has put in place requisite institutions and laws that comply with existing international standards to counter financial crimes, which include money laundering and the financing of terrorism. 

This comes as the country is set to undergo an evaluation next year, of compliance in combating money laundering and financing of terror activities in accordance with the international standards.

Sydney Asubo, acting Executive Director of the recently established Financial Intelligence Authority (FIA), said the country is ready for the upcoming assessment on measures put in place by Uganda to mitigate risks.

The ministry of finance is holding a two-day stakeholders’ workshop to prepare officials ahead of an assessment of Uganda’s readiness to fight financial crime. The workshop was attended by officials from government ministries, departments and agencies, the banking industry, insurance as well as the securities markets.

The exercise aims to establish Uganda’s compliance with recommendations made by the international Financing Action Task Force (FATF). 

FATF is an independent intergovernmental body that develops and promotes policies to protect the global financial system against money laundering, terrorism financial and the financing of proliferation of weapons of mass destruction.

The FATF was established by the G20, which comprises of the 20 largest world economies, and came up with standards to combat money laundering and financing of terror activities.

The evaluation will probe the technical, legal and institutional frameworks in place such as laws criminalizing money laundering, and whether laws provide for the freeze of assets of terrorism groups, and how many cases are being prosecuted.

Uganda is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) comprising of 16 African countries. 

Asubo said that Uganda was first evaluated in 2005 by FATF. At that time, there was no legal framework in place. 

“But now we have in place the anti-money laundering Act 2013 which forms part of the first technical compliance required,” said Asubo.

He added that Uganda also has established institutions such as Bank of Uganda, Directorate of Public Prosecutions, Inspectorate of Government and Financial Intelligence Authority and Police to counter financial crimes.

Asubo added that next year’s assessment will focus more on assessing the effectiveness of the institutions and legal framework already put in place. 

He added that said failure to comply with the set standards leads to imposing of sanctions against member states by FATF which include blockage of citizens and institutions from transacting money and business across borders.

Joseph Jagada, a law enforcement expert from Tanzania said that the assessment process will last 12 months beginning June 2015; and conclude in March 2016 with the publication of a final report that will provide a rating for Uganda’s compliance.

Speaking at the opening of the workshop, Prof. Tarsis Kabwegyere, the minister in charge of general duties in the Office of the Prime Minister said that money laundering is a serious global problem.

“At the global level, the International Monetary Fund estimated the extent of money laundering to be at 2 percent to 5 percent of global GDP,” Kabwegyere said.

Kabwegyere said, “Terrorism and money laundering would jeopardize the socio-economic development for our country. Serious crimes such as drug trafficking, corruption, tax evasion are intrinsically damaging to the country as they can weaken the economy.”

He added that Uganda cannot afford to be seen as a weak link in the chain of international efforts to combat money laundering and terrorism financing.

“An unfavorable rating would mean that Ugandan businesses, including financial institutions would face greater scrutiny, higher costs of doing business, delays and other time consuming and unnecessary barriers when doing business with overseas counterparts,” he added.