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Bank of Uganda Directs Reporting Entities to Enhance Terrorist Financing and Proliferation Risk Management
The Supervision Directorate at the Bank of Uganda has issued guidelines to reporting entities on the implementation of measures to prevent terrorist financing and proliferation. The directives aim to strengthen risk management practices and enhance compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
Automated Customer Screening
Reporting entities are required to have an automated system in place to screen customers during on-boarding and throughout the life cycle of their relationships. This includes:
- Beneficiaries
- Guarantors
- Principals
- Beneficial owners
- Nominee shareholders
- Directors
- Signatories
- Powers of attorney
- Any other parties linked to accounts
Transaction Screening
Each incoming and outgoing transaction must be screened for potential matches with sanctions lists in real-time. The screening process should consider the following data fields:
- Parties involved
- Bank names
- Bank identifier codes (BIC)
- Free text fields
- Address of the remitter and beneficiary
Sanctions Match and Resolving False Positives
When a positive match is detected, reporting entities must freeze funds and assets without delay and investigate further to confirm or discount the alert. Determining a true match can be challenging due to various factors, including:
- Language
- Spelling
- Abbreviations
- Aliases
Reporting Obligations and Procedures for Sanctions Reporting
In cases where a positive sanction match is identified, assessed, and confirmed, reporting entities must submit a report to the Financial Intelligence Authority (FIA) without delay. The report should include information specified in Regulation 12(9) of the Anti-Terrorism Regulations, 2016.
Exceptions to Terrorist Financing and Proliferation Risk Management
Reporting entities are advised to consult with the FIA regarding exceptions to terrorist financing and proliferation risk management, including limited circumstances where a designated party may access assets for:
- Basic living expenses
- Extraordinary expenses
The guidelines emphasize the importance of strengthening risk management practices and enhancing compliance with AML/CFT regulations. Reporting entities are urged to review their internal policies and procedures to ensure compliance with these directives.
Contact
For further information or clarification on the guidelines, please contact the Supervision Directorate at the Bank of Uganda.
About the Bank of Uganda
The Bank of Uganda is the central bank of Uganda responsible for promoting financial stability, economic growth, and the development of the country’s financial sector.