Financial Crime World

Banking Regulations in Uganda

Financial Intelligence Authority (FIA)

The Financial Intelligence Authority (FIA) plays a crucial role in enhancing the identification of proceeds of crime and combating money laundering and terrorism financing. It exercises supervisory powers over banks regarding these issues.

Anti-Money Laundering Act (AMLA) and Counter-Terrorism Financing Requirements

Banks operating in Uganda are subject to several obligations under the Anti-Money Laundering Act (AMLA), including:

  • Registration with the FIA as an accountable person: Banks must register with the FIA to ensure they meet the requirements for anti-money laundering and counter-terrorism financing.
  • Customer identification through due diligence measures: Banks are required to conduct thorough customer due diligence, including identifying and verifying the identity of their customers.
  • Implementation of risk assessment measures for money laundering and terrorism financing: Banks must implement effective risk assessment measures to identify and mitigate potential risks related to money laundering and terrorism financing.
  • Maintenance of customer records for at least ten years: Banks are required to maintain accurate and complete customer records for a minimum period of 10 years.
  • Recording and reporting cash transactions exceeding UGX20 million: Banks must record and report all cash transactions exceeding UGX20 million to the FIA.
  • Monitoring and reporting suspicious transactions: Banks must monitor their transactions and report any suspicious activity to the FIA.
  • Periodic anti-money laundering audits and timely submissions of reports to the FIA: Banks are required to conduct regular anti-money laundering audits and submit their findings to the FIA in a timely manner.

Depositor Protection

The Financial Institutions Act establishes a Deposit Protection Fund as a deposit insurance scheme for customers of deposit-taking institutions licensed by BOU. This fund provides protection to depositors in case of bank failures or insolvency.

Bank Secrecy

Banks owe their customers a duty of confidentiality, supported by Article 27(2) of the Constitution of Uganda. However, this duty can be overridden in four instances:

  • Disclosure under compulsion of law: Banks may disclose customer information to authorized authorities if required by law.
  • Duty to disclose to the public: Banks may disclose customer information to the public if it is in the interest of national security or for the benefit of society.
  • Interests of the bank require disclosure: Banks may disclose customer information if it is necessary to protect their interests or prevent potential harm to themselves.
  • Customer consent: Banks may disclose customer information with the explicit consent of the customer.