Actionaid petitions court over frozen accounts

ActionAid Uganda has petitioned the Commercial Court, seeking an order compelling Financial Intelligence Authority (FIA) and Standard Chartered Bank Uganda Limited to unfreeze its bank accounts.

The NGO through its lawyers argued that Bank of Uganda (BoU), which had directed the freezing of its accounts on the request of police pending investigations over alleged money laundering, had cleared them.

In October, BoU closed all the bank accounts belonging to Actionaid Uganda, a Non-Governmental Organisation operating in the country, following a police investigation of alleged money laundering.

However, BoU in a letter to Standard Chartered copied to Actionaid, directed that the NGO's accounts be unfrozen on grounds that their financial transactions were legitimate and legal.

"Following a review of the facts upon which the freeze orders had been issued on the NGO, it was established that the funds on the relevant accounts were genuine," BoU stated in a letter copied to Nyanzi, Kiboneka and Mbabazi Advocates, the law firms representing the NGO.

Court documents indicate that BoU has powers under section 118 of the FIA and section 82 of the Microfinance Deposit-Taking Institution Act, 2003 to freeze accounts with the said institutions, which are suspected to hold proceeds of crime.

It further states that BoU on October 20, 2017 directed the unfreezing of the accounts of the NGO held at Stanchat, Uganda and referred the matter to FIA, which later ordered for the freezing of the same account again.

This prompted Actionaid Uganda to seek legal redress from Commercial court.     

According to the NGO, for the past two months, it has explored administrative and diplomatic efforts with government agencies and ministries including meeting with the Prime Minister to get the bank accounts unfrozen in vain.

This prompted ActionAid Uganda to seek legal redress from Commercial court.                

"If the application succeeds, it will not only relieve ActionAid of the immense inconvenience it has suffered, but set precedence for other civil society fraternity in future," the organisation's country director, Arthur Larok said. 

He adds that "We also expect to stop this precedence of arbitrary siege and closure of civil society organisation's accounts as it could become a standard mode of operation. We believe there is a good cause and we have to put together a strong legal team and formidable evidence to challenge the status quo".

The director said many Actionaid programmes cannot operate normally, leaving over a thousand sponsored children without education. 

Hundreds of Actionaid employees jammed court, donning white t-shirts inscribed with words " let farmers access input, let children go to school, free women from gender based violence and support social justice struggle".

They appeared before Justice Anne Bitature Mugenyi for the hearing of the case but she adjourned it to January 12, 2018.