Financial Crime World

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Corporate Governance and Risk Management Must Rise to the Challenge of ML/TF

In today’s rapidly changing financial landscape, it is imperative that sectors must continue to rise to the challenge of ensuring that their corporate governance structures and risk management systems are designed and constantly redesigned to take care of the growing threat of Money Laundering (ML) and Terrorist Financing (TF) across the globe.

Regulatory Authorities Must Take Action

Regulatory Authorities, including Financial Intelligence Units and Central Banks, must also ensure that technology and globalization does not give money launderers an opportunity to explore new techniques to commit and cover their crimes. In this regard, it is heartening to note that Uganda has taken significant steps in combating ML/TF through various initiatives and programs.

Training and Capacity Building

Recently, the Financial Intelligence Authority (FIA) organized a training event for 80 forex bureaus on the registration, use, and application of the goAML web-based program. The training aimed at enhancing the capacity of these institutions to report cases of ML/TF in a timely and effective manner.

  • The training reported an increase in participants’ confidence in detecting fraud after receiving the training.
  • Many participants made use of the training material in their work and trained others within their respective forex bureaus.

Customs-FIU Cooperation Handbook

In another significant development, Uganda has published the Customs-FIU Cooperation Handbook (CFCH), a comprehensive tool designed to enhance the capacity of Financial Intelligence Units (FIUs) and Customs Services to combat financial crime and money laundering in the Customs arena.

  • The handbook provides a three-pronged approach to address Customs-based money laundering, including identification, interdiction, and investigation.
  • This initiative is expected to strengthen cooperation between FIUs and Customs Services in the fight against ML/TF.

AML/CFT Training for Payment Service Providers & Payment System Operators

Payment Service Providers (PSPs) and Payment System Operators (PSOs) are also required to meet specific AML/CFT obligations, as stipulated by the Anti-Money Laundering Act (AMLA), 2013. PSPs and PSOs provide lower-cost options for individuals seeking to send money quickly, making them vulnerable to ML/TF.

  • A recent presentation on AML/CFT training for PSPs and PSOs highlighted the importance of understanding their obligations under the AMLA and the risks associated with their business activities.

Risk Assessment Reports

Uganda has also published several risk assessment reports, including:

  • Legal Persons & Arrangements ML/TF Risk Assessment Report
  • Terrorism Financing Risk Assessment for Non-Profit Organizations (NPOs) 2023
  • Money Laundering and Terrorism Financing National Risk Assessment (NRA) Report for Uganda 2023

These reports identify the threats, vulnerabilities, and methods used by criminals to launder proceeds of crime and finance terrorism using legal persons and arrangements. They also provide an understanding of the terrorism financing risk posed by the NPO sector in Uganda and highlight the need for focused and proportionate measures to mitigate this risk.

Conclusion

In conclusion, it is imperative that sectors must continue to rise to the challenge of ensuring that their corporate governance structures and risk management systems are designed and constantly redesigned to take care of the growing threat of ML/TF across the globe. Regulatory Authorities, including Financial Intelligence Units and Central Banks, must also ensure that technology and globalization does not give money launderers an opportunity to explore new techniques to commit and cover their crimes.

Uganda’s efforts in combating ML/TF through various initiatives and programs are commendable, and it is essential that these efforts continue to be strengthened and sustained.