Uganda Off List Of Money Laundering, Financing Terrorism

by Christopher Kiiza
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The Financial Action Task Force (FATF), a global body mandated to lead action to counter threats of abuse of the financial system by criminals and terrorists has today Friday, February 23, 2024 removed Uganda from the Grey list – a significant milestone for Uganda’s economy and financial integrity.

This follows a recent onsite assessment to verify the reforms for anti-money laundering and countering the financing of terrorism put in place by Uganda.

The Ministry of Finance made the announcement on Friday afternoon.

“Working with FATF, Uganda successfully completed the reforms for combating money laundering, countering terrorism financing and proliferation financing in line with international standards. Through the Financial Intelligence Authority of Uganda (FIA), Uganda will continue fostering the integrity and stability of the financial system,” reads the brief statement from the Ministry of Finance.

The Financial Intelligence Authority of Uganda, a government body mandated to combat money Laundering, countering Terrorism financing and countering Proliferation explains why this is huge success for Uganda.

“Being removed from the FATF grey list is a testament to Uganda’s commitment to strengthening its anti-money laundering and counter-terrorism financing framework. It demonstrates our dedication to upholding global standards and combating financial crime,” FIA explains.

“This achievement opens up a world of opportunities for our economy. It boosts investor confidence, encouraging foreign investment & fostering economic growth. It also enhances our reputation on the international stage, making us a more attractive destination for business.”

Removal from the grey list signifies that Uganda’s financial system is now recognized as more robust and resilient. This protects the integrity of Uganda’s financial institutions and safeguards the interests of ordinary Ugandans, ensuring a more stable financial environment.

The implications of this milestone extend beyond the financial sector. It reflects positively on Uganda’s overall governance and commitment to fighting corruption and illicit financial activities. It reinforces our position as a responsible member of the global community.

Background

In 2020, it was determined that Uganda had not done enough to strengthen it’s financial system to combat money laundering and terrorism financing, and as a result, the country was placed on the grey list.

A total of 22 issues were identified, and the different timelines for different issues were given to Uganda to have them addressed. 

The Finance Minister, Matia Kasaija then wrote to the FATF President to confirm the political commitment by the Government of Uganda to fully address the deficiencies in Uganda’s anti money laundering and countering the financing of terrorism (AML/CFT) regime.

FATF then put Uganda on the grey list meaning that the country was actively working with the FATF to address strategic deficiencies in its regimes to counter the vices. Uganda committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.

Countries that refuse to collaborate with FATF and fail to address the deficiencies are identified as high-risk and put on black list, meaning that they are slapped with sanctions.

The FATF then calls on all member countries and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the black listed country.

Since Uganda showed political commitment, the Government of Uganda has since February 2020 been working with the FATF-ICRG and ESAAMLG in addressing its strategic AML/CFT deficiencies and has undertaken a number of policy and operational measures in line with its action plan.

Some of the policy and operational measures taken by Uganda include: Adopting a National AML/CFT Strategy; Developing and implementing risk-based supervision to Financial Institutions and Designated Non-Financial Businesses and Professions (DNFBPs); Enforcing Beneficial Ownership declaration obligations; Ensuring that competent authorities have timely access to accurate, basic, and beneficial ownership information for legal entities; Establishing and implementing policies and procedures for identifying, tracing, seizing, and confiscating proceeds and instrumentalities of crime; and implementing Targeted Financial Sanctions related to Proliferation Financing, among others.

In its November 2023 report, FATF announced that it had made determination that Uganda had substantially completed its action plan and warranted an on-site assessment to verify that the implementation of AML/CFT reforms had begun.

FATF further noted that the necessary political commitment remained in place to sustain implementation in the future.

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