Uganda’s Quest to Stem Trade-Based Money Laundering: Experts Release Joint Publication

July 19, 2023 - Kampala, Uganda

A new publication by Advocates Coalition for Development and Environment (ACODE) and Global Financial Integrity (GFI) shines a light on the alarming prevalence of trade-based money laundering (TBML) in Uganda. The study reveals that the country’s extractive industry, agricultural sector, and import/export businesses are particularly vulnerable to this illicit practice.

Key Findings

• Corruption, lack of coordination among stakeholders, relaxed oversight over Free Trade Zones, and limited understanding of TBML techniques used by criminals are significant entry points for money launderers.
• The Ugandan government has taken commendable steps to combat TBML through various policies, legislation, and institutional frameworks.

Recommendations

• Raise awareness and provide training on TBML among private and public actors.
• Implement beneficial ownership laws.
• Increase support and funding to frontline agencies.

The Impact of Illicit Financial Flows (IFFs) in Uganda

• IFFs are estimated to cost the country over UGX.2 trillion annually, with TBML emerging as a significant contributor to this problem.
• TBML is a sophisticated method of money laundering that disguises illegal proceeds through legitimate trade transactions, making it difficult for financial institutions and customs authorities to detect.

The Need for Effective Detection Methods

• The report highlights the need for effective detection methods to combat this menace, which poses a significant threat to Uganda’s financial system and economy.

Conclusion

• The joint publication aims to stimulate productive dialogue and encourage collaborative actions among policymakers, practitioners, and stakeholders invested in combating TBML in Uganda.
• It is hoped that the findings will serve as a valuable resource in the country’s efforts to strengthen its anti-money laundering regime.