Money Laundering Investigation Techniques in Uganda Yield Huge Dividends

Uganda’s Revenue Authority (URA) has made a bold move to combat fraud and corruption by creating an anti-money laundering unit in 2020. The unit, which works closely with tax investigators, the National Roads Authority, Financial Intelligence Agency, and Immigration and Passport Control, has recovered a staggering USD 10.5 million from the road construction sector alone. Additionally, reported losses have decreased by approximately USD 16.6 million.

Success Stories

• Kenya’s Revenue Authority (KRA) saw a significant boost in tax evasion investigations and revenue collection following a technical assistance project aimed at increasing their capacity to investigate tax crimes and money laundering.
• The collaboration between KRA and the Financial Reporting Centre has led to the successful prosecution of tax offenses and money laundering cases, resulting in the recovery of roughly USD 3 million.

Whole-of-Government Approach

The success of these initiatives is attributed to the whole-of-government approach to tackling illicit financial flows, supported by the World Bank since 2020. A multidisciplinary team of anti-money laundering experts and tax enforcement experts has been working with Kenya, Uganda, Tanzania, Rwanda, Burundi, and South Sudan to create innovative technical assistance products in areas where tax and money laundering intersect.

Intersections between Tax and Money Laundering

• The methods used to conceal assets from revenue authorities are often the same as those used to conceal ill-gets gains.
• Therefore, the skills of tax investigators and the information available to revenue authorities can be invaluable in supporting money laundering investigations.
• Conversely, anti-money laundering authorities have access to a wide range of information that can be relevant when investigating tax offenses.

International Recommendations

This approach has been promoted by the Organization for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF), which recommends including tax authorities as a relevant authority in money laundering investigations and using tax liabilities for asset recovery.

Global Support

The Global Tax Program, with funding from a multi-donor trust fund for advancing tax policy, has supported this project. The work has also benefited from knowledge produced by the Stolen Asset Recovery Initiative on tax and crime, which was rolled out into practical workshops centered around investigating tax evasion, fraud, corruption, and money laundering.

Regional Expansion

The team has replicated this approach in other regions, including Asia, East Africa, and Latin America. In collaboration with regional organizations, the World Bank will continue to roll out this approach to strengthen the capacity of countries to investigate tax crimes and combat money laundering.