Financial Crime World

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Uganda Fines Financial Institutions for AML/CFT Non-Compliance

KAMPALA, UGANDA - The Ugandan government has imposed fines on several financial institutions for non-compliance with the country’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations.

Background

The AML/CFT framework in Uganda is guided by the 40 recommendations of the Financial Action Task Force (FATF), which aim to combat money laundering and terrorist financing. The FATF recommendations are considered international best practices for AML/CFT compliance.

Suspicious Transaction Reporting Obligation

Under Ugandan law, financial institutions have a statutory obligation to report suspicious transactions to the Financial Intelligence Authority (FIA) within 48 hours. This includes transactions that may be related to money laundering or terrorist financing.

Indicators of Suspicious Transactions

The FIA has listed several indicators of suspicious transactions, including:

  • Client starts conducting frequent cash transactions in large amounts when this has not been a normal activity for the client in the past.
  • Transaction involves non-profit or charitable organization for which there appears to be no logical economic purpose.

Procedures for Reporting Suspicious Transactions

The FIA has developed an information guide on procedures for reporting suspicious transactions, including:

  • Who can report suspicious transactions (financial institutions, individuals)
  • What constitutes a suspicious transaction
  • How to report a suspicious transaction

Protection from Prosecution and Confidentiality

Individuals who make reports of suspicious transactions are protected from prosecution under Ugandan law. The identity of the person filing an STR is strictly confidential and only accessible to FIA officers.

No Breach of Disclosure of Information

A disclosure made in good faith to FIA will not be treated as a breach of any contract, enactment, rule of conduct, or other provision restricting disclosure of information.

The Ugandan government has urged financial institutions to take immediate action to comply with AML/CFT regulations and prevent the misuse of their services for money laundering and terrorist financing.