MPs amend Anti-Money Laundering Act to address new financial scams

Oct 25, 2020

Fraudsters trading as "Dunamiscoins (Uganda) Ltd", and "Global Cryptocurrency (Uganda) Ltd", have cheated Ugandans of billions of shillings.

PARLIAMENT|MONEY|LAUNDERING

KAMPALA - Parliament has approved a motion by the Government to amend the second schedule of the Anti-Money Laundering Act to address new types of financial scams.

The state minister for finance, David Bahati, explained that the amendment of the second schedule of the AntiMoney Laundering Act, 2013, was required to address a gap in Uganda's current legal framework which does not make provisions for the regulation of Virtual Asset Service Providers (VASPs).

Considering that the matter at the tail end of Wednesday's plenary sitting and many had not internalised it, Dokolo Woman MP Cecilia Ogwal wanted it differed to a period when legislators will not be unsettled, but she lost in her bid.

Explaining the importance of the amendment, Bahati said: "We have handled more than this. The schemes continue to defraud Ugandans. They need to be regulated."

The finance committee chairman, Henry Musasizi, said as a result of lack of a regulatory framework in this field, many Ugandans have fallen victim to scams perpetrated by individuals and companies purporting to be engaged, for example, in cryptocurrency margin trading, whereas they are actually Ponzi or pyramid.

"Fraudsters trading as "Dunamiscoins (Uganda) Ltd", and group trading as "Global Cryptocurrency (Uganda) Ltd", have cheated Ugandans of billions of shillings. Although the fraudsters are currently being prosecuted in courts of law, the victims of these scams have limited options for the recovery of their money," Musasizi said.

Emphasising the urgency of passing the amendment, the Speaker of Parliament, Rebecca Kadaga told Parliament about a senior government official who lost his retirement money totalling sh140m in similar schemes.

Kasilo County MP Elijah Okupa said: "I know an MP who was defrauded in these schemes and wanted to commit suicide. It is a big problem which we need to solve. Let us pass the Bill.

Budadiri West MP Nathan Nandala Mafabi said: "Even if we pass it, it will not solve the problem. Our people want quick money. If a minister of finance can be conned of sh250m, it is sophisticated."

Ogwal later changed her mind and said: "After hearing that one of our colleagues almost committed suicide after being defrauded in those schemes. Let us pass the amendment." 

The amendment

The finance committee said during the Financial Action Taskforce (FATF) plenary meeting which was held in Paris, France in October last year, the regulation of VASPs was discussed in terms of mitigating the risk of using them to launder money and financing terrorism.

"As a result, the FATF amended recommendation 15 to incorporate the regulation of VASPs as a requirement by all jurisdictions. By amending the second schedule in order to list VASPs as accountable persons, Uganda will be complying with the global anti-money laundering and countering the financing of terrorism standards set by the FATF," Henry Musasizi, the finance committee chairman, said.

(adsbygoogle = window.adsbygoogle || []).push({});