Uganda: A Hub for International Financial Crimes

People Trafficking

• Uganda is a significant origin, transit, and destination country for human trafficking
• Adults are subjected to forced labor in various sectors, including agriculture, fishing, forestry, mining, and street vending
• Women and young girls are particularly vulnerable to transnational trafficking, often lured into sex work
• Children are also at risk, forced into labor or exploited in the sex trade
• Traffickers target children from neighboring countries, including DRC, Rwanda, Burundi, Kenya, Tanzania, and South Sudan
• Easing of COVID-19 restrictions increases cross-border human flow, making it easier for criminals to operate

Arms Trafficking

• Uganda is a significant hub for arms trafficking in East, Central, and West Africa
• Historical conflicts with neighboring countries have led to a proliferation of weapons
• Widespread illegal gun ownership despite licensing requirements
• Small arms trafficking thrives alongside cross-border cattle theft
• Inter-ethnic conflicts between farmers and pastoralists pose challenges to disarmament
• Ammunition and small arms manufacturers operate domestically and source trafficked supplies
• Most illegal guns are imported from Russia, US, or Ukraine

Environmental Crimes

• Uganda is a significant source for charcoal and timber destined for Kenya and the international market
• The unregulated charcoal industry is a magnet for transnational organized crime
• Ineffective law enforcement and corruption along borders allow Ugandan and DRC timber to cross into Kenya
• At least one third of Ugandan timber production is illegal, leading to a loss of taxes and deforestation
• Illegal tree felling for charcoal is exacerbated by logging moratorium in neighboring Kenya
• Uganda supplies more than half of Kenya’s charcoal despite a ban
• Over two thirds of illegal timber originating in the DRC and destined for other markets crosses Uganda

Drugs

• Uganda is a transit country and a destination for drug smugglers, particularly heroin and cocaine
• Heroin primarily enters the country through drug mules or building materials
• Drug barons recruit youths as couriers once drugs enter the country
• Porous borders, weak security systems, and rampant corruption make it easier for drug traffickers to operate

Financial Crimes

• Key Ugandan government agencies lose billions to corruption and financial crimes annually
• Cyberfraud is a concern, with billions lost in 2021 alone
• Tax evasion is massive, with millions evading taxes

Criminal Actors

• High-level Ugandan officials have been implicated in organized crime
• Elections are allegedly influenced by vote-buying and security services suppressing opposition activities
• State-embedded actors control Uganda’s non-renewable resource crimes market
• Military is involved in organized crime, facilitating smuggling throughout the region
• Racketeering occurs within revenue authorities and land registries

Foreign Criminal Actors

• Uganda is a magnet for foreign criminal actors due to widespread corruption
• Politicians allegedly bankrolled by foreign criminals seeking favors
• Organized criminal groups are multi-national, comprising both Ugandans and East Africans
• West Africans play an essential role in ivory/pangolin, drugs, and minerals trade
• Pangolin scale and ivory trafficking markets linked to Chinese and Vietnamese criminals
• Indian criminals engage in kidnapping other Indian nationals in Uganda

Criminal Networks

• Criminal networks operate across various criminal markets in Uganda
• Involved in small-scale precious metal mining, cattle rustling, diamond smuggling, uranium smuggling, human smuggling, ivory trafficking, timber smuggling, arms trafficking, cocaine trafficking, counterfeiting, and other crimes

The Private Sector

• The private sector is closely intertwined with politics, with corruption central to its advancement
• Revenue from illicit gold from the DRC and illicitly obtained South Sudanese oil and timber laundered through Ugandan banking system
• Pastors, imams, and local leaders at churches and mosques recruit domestic workers for Middle Eastern countries

Organized Crime Groups

• The ADF-NALU, based along the Ugandan-Congolese border, is the most important mafia-style group in the country
• Involved in illicit gold mining, wildlife trafficking, timber smuggling, and precious metal mining between Uganda and the DRC
• Known to abduct children to serve as both child soldiers and wives
• More than a dozen lethal organized criminal gangs operate in Uganda, primarily in Kampala, engaging in kidnapping, murder, robbery, rape, various forms of trafficking, and home invasions

Leadership and Governance

• Uganda faces significant challenges in addressing organized crime due to a lack of implementation and law enforcement
• Intertwined state, security, and ruling party institutions weakens separation of powers
• Bloated administration, costly system of patronage, and corruption, as well as inconsistent policy implementation, weaken Uganda’s economic prospects
• Grand-scale theft of public funds through diversion of foreign aid and other resources towards corrupt officials
• Lack of transparency regarding government transactions fosters corruption in public procurement process
• Anti-corruption institutions hindered by lack of political will, understaffing, underfinancing, and lack of capacity

Ugandan Government Countermeasures

• Ugandan government has signed international treaties and conventions relating to organized crime
• Signed bilateral labor agreements with Saudi Arabia and Jordan
• Powerful legislative framework against transnational organized crime generated due to history of armed conflict, child kidnappings, and abductions

Ugandan Judicial and Security Challenges

• Judicial system faces multiple challenges, including lack of independence, inadequate human resources, and corruption, with judges often accepting bribes for favorable judicial decisions
• Individuals resort to other means for recourse due to widespread distrust towards formal justice institutions
• Justice system often favors criminals, including terrorists, at the expense of law enforcement
• Law enforcement officials are corrupt, with both bribery and impunity common
• Military’s involvement in law enforcement and lack of non-conviction-based asset recoveries allow many officials to amass ill-gotten wealth
• Human rights abuses and violence against opposition party supporters by security forces during elections

Economic and Financial Environment

• Informal, cash-based economy in Uganda makes it an attractive environment for money laundering, with most of the money coming from domestic sources linked to corruption
• Anti-money laundering mechanisms are relatively new, and implementation remains a challenge
• Low administrative sanctions for money laundering offenses and lack of evidence in some high-profile cases
• Uganda grey-listed in anti-money laundering-related matters due to capacity issues and high financial integrity risks
• Listed as one of four African countries posing financial risks to the European Union due to anti-money laundering and terrorism financing shortfalls

Civil Society and Social Protection

• NGOs provide care and advocate for the rights of drug users
• Human trafficking victims receive limited assistance, no legislation for witness protection, and implementation often undermined by corruption
• Prevention policies exist, but implementation hindered by corruption and public mistrust of law enforcement
• Civil society plays a significant role in combatting organized crime, especially human trafficking
• Churches vocal in speaking out against human trafficking
• Civil society groups halted without notice during election campaign, internet access disconnected, and social media access blocked
• Self-censorship and intimidation and violence by state security forces against journalists and civil society groups occur regularly
• Media fears covering, airing, or printing information about organized crime and corruption.