Uganda: Anti-Money Laundering Guidelines Tighten Grip on Financial Institutions
The Government of Uganda has issued guidelines for financial institutions to prevent money laundering and terrorist financing activities. The new regulations require all accountable persons, including banks and other financial institutions, to establish an Anti-Money Laundering (AML) program.
Requirements for AML Programs
An AML program must have a system of internal policies, procedures, and controls in place to detect and prevent money laundering risks. This includes:
- Identifying high-risk operations, products, services, delivery channels, customers, and geographical locations
- Designing procedures to detect and report suspicious transactions
- Conducting regular risk assessments and audits
Employee Training and Compliance Function
The guidelines emphasize the importance of employee training on AML/CFT frameworks and require financial institutions to provide ongoing training programs for their staff. Additionally:
- Financial institutions must have a designated compliance function with a compliance officer who is responsible for monitoring and reporting on compliance deficiencies
- They must maintain accurate and up-to-date records of customer identification and transaction history
Customer Due Diligence and Risk Assessment
Financial institutions must adopt a risk-based approach to Customer Due Diligence (CDD), with:
- Enhanced due diligence measures required for high-risk customers
- Simplified due diligence for low-risk customers
- Regular screenings of employees
Compliance and Penalties
The guidelines come into effect immediately, and financial institutions are expected to comply within a specified timeframe. Failure to comply may result in penalties and fines.
Statement from the Government
In a statement, the government emphasized the importance of preventing money laundering and terrorist financing activities in Uganda, saying that it is essential for maintaining stability and integrity in the country’s financial system.
By implementing these guidelines, Uganda aims to prevent money laundering and terrorist financing activities, ensuring the stability and integrity of its financial system.