News & Up­dates:

Uganda risks being blacklisted by the Financial Action Taskforce (FATF) if the government does not tackle money laundering by May 2022.

This was revealed by the Executive Director of the Finance Intelligence Authority, Sydney Asubo while appearing before the Committee on Finance on January 20th, 2022.

Asubo said that Uganda was placed on the grey list in 2020, a list that highlights countries that have significant shortfalls in tackling money laundering.

He noted that FATF had written to the Minister of Finance, who wrote back making commitments to address the identified issues by January 2022 but later pushed it to May 2022 because of the impact of COVID-19.

He was, however, concerned that a number of issues were still outstanding. He added that FATF had issued a notice that if these issues were not addressed, then the country would be moved to the blacklist.

It is a requirement by the FATF, a global inter-governmental organization on the initiative of the G7countries, to develop policies to combat money laundering and terrorism financing.

Uganda was put on the ‘Grey List’, a list that shows the performance of countries regarding the safety or level of risk of their financial systems. This came after the FATF declined to adopt Uganda’s money laundering and Terror financing risk assessment report, done by the Ministry of Finance, the Financial Intelligence Authority (FIA) and some NGOs in 2018.

The consequence of Uganda’s being blacklisted is that transactions originating from Uganda or made through Uganda’s financial system and cash from or to the country, face more scrutiny by the international systems, which leads to delays in concluding business transactions.

Additionally, when a country is blacklisted, countries or other financial jurisdictions may block some transactions if they cannot ascertain the source or destination of the money or prove that it has nothing to do with money laundering.

This move greatly delays business transactions and increases the cost of doing business.

Asubo told the committee that out of the 2,419 suspicious transaction reports (STRs) received and analyzed, 76 intelligence reports were generated and disseminated to various law enforcement agencies for further investigations.

He asked the legislators for an increased budget allocation to cater to unfunded priorities, which include staffing, information and communication technology, and public awareness, among others, to enable the authority to carry out its mandate.