Uganda Passes Laws to Strengthen Beneficial Ownership Transparency and Combat Money Laundering and Terrorism Financing

Introduction

In a move aimed at strengthening beneficial ownership transparency and combating money laundering and terrorism financing, Uganda has passed several amendments to its laws. The amendments were tabled in Parliament on August 23, 2022, and have since been passed with some modifications.

Key Provisions of the Amendments

• Introduce provisions requiring legal persons and partnerships to maintain a register of beneficial owners
  • Information required includes:
    • Names
    • Postal address
    • Identification particulars
    • Nature of beneficial ownership
    • Other related matters
• Define “beneficial owner” as a natural person who has ultimate or final ownership or control of the entity or a natural person on whose behalf a transaction is conducted in an entity
• Require accountable persons to take appropriate steps to identify, assess, and monitor their money laundering, terrorism financing, and proliferation financing risks
• Empower the Financial Intelligence Authority and supervisory authorities to levy administrative penalties for breaches of the provisions of the Anti-Money Laundering Act

New Offence: Proliferation Financing

The amendments create a new offence of proliferation financing, which makes it illegal for individuals or organizations to: + Make available an asset + Provide a financial service + Conduct a financial transaction with knowledge that the asset, service, or transaction is intended to facilitate activities that constitute proliferation financing

Global Trend: Beneficial Ownership Transparency

The introduction of beneficial ownership transparency measures in Uganda is not unique. Other countries such as: * Singapore * Kenya * Tanzania * Ghana * Nigeria have also introduced similar provisions in their laws.

Impact and Implementation

If enacted, the amendments will require persons who own or control a company, partnership, trust, or cooperative, or those who receive benefits from transactions with these entities to provide information about themselves to be recorded in the register of beneficial owners. The measures are aimed at strengthening Uganda’s ability to combat money laundering and terrorism financing, and to comply with international standards set by the Financial Action Task Force (FATF). Legal bodies such as companies, trusts, cooperatives, and partnerships will be required to: + Maintain a register of beneficial owners + Keep the register at their registered offices + Notify the Registrar of any changes to the register within 14 days

Expected Outcomes

The laws are expected to enhance transparency and accountability in Uganda’s financial sector, and to reduce the risk of money laundering and terrorism financing.