Financial Crime World

Uganda’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Framework

Emphasis on Reporting Suspicious Transactions in Uganda

KAMPALA, UGANDA - The Financial Intelligence Authority (FIA) has emphasized the importance of reporting suspicious transactions in Uganda to prevent money laundering and terrorist financing.

Background

Under Uganda’s AML/CFT framework, which is based on the 40 FATF Recommendations, financial institutions and designated non-financial businesses and professions are required to report suspicious transactions to the FIA. This statutory obligation is provided for under section 9 of the Anti-Money Laundering Act (AMLA) 2013 as amended and regulations 39 and 40 of the AML Regulations 2015.

According to the AMLA, a person has a legal obligation to report suspicious transactions if they know or suspect that any property represents the proceeds of crime or is intended to be used in connection with such offenses, or terrorist property. This obligation arises even if the person cannot identify or suspect the specific nature of the offense or the details of any plan for an act of terrorism.

Examples of Suspicious Transaction Indicators

The FIA has listed examples of suspicious transaction indicators on its website, including:

  • Unusual transactions
  • Cash transactions below the reporting threshold amount
  • Transactions involving non-profit or charitable organizations with no logical economic purpose

Reporting Suspicious Transactions

When reporting suspicious transactions, individuals are advised to follow the procedures set out by the FIA. The agency has also developed an information guide on how to identify a suspicious transaction, when to submit a report, and what to report in an STR.

Confidentiality and Protection

The identity of the person filing an STR is strictly confidential and access to disclosed information is restricted to Financial Intelligence Authority Officers only. Making a suspicious transaction report can protect individuals from being subsequently prosecuted for money laundering or terrorist financing offenses, provided they have reported in good faith.

Consequences of Non-Compliance

According to Section 14 (1) of the AMLA, a disclosure made in good faith to the FIA will not be treated as a breach of any contract, enactment, rule of conduct, or other provision restricting disclosure of information. The main offenses relating to suspicious transaction reporting in respect of money laundering and terrorist financing include:

  • Failure to report suspicious or unusual transactions
  • Tipping off

Conclusion

Reporting suspicious transactions is an essential part of Uganda’s AML/CFT framework, and individuals who fail to comply with this obligation may be subject to criminal prosecution. It is crucial for financial institutions and designated non-financial businesses and professions to understand their legal obligations and report any suspicious transactions to the FIA in a timely manner.