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Uganda Removed from FATF Grey List: But the Fight Against Terrorist Financing Is Far From Over

A Major Boost to Uganda’s Financial Reputation

In a significant achievement, Uganda has been removed from the Financial Action Task Force (FATF) grey list after successfully addressing strategic deficiencies in its anti-money laundering and counter-terrorism financing systems. The FATF grey list is a list of countries considered to have weaknesses in their systems for combating money laundering, terrorism financing, and proliferation financing.

A Commendable Effort by Stakeholders

Uganda’s removal from the grey list comes after a commendable effort by various stakeholders, including the government, financial institutions, and regulatory bodies. The country has been working to strengthen its anti-money laundering and counter-terrorism financing measures since 2020, when it was first placed on the grey list.

What is the FATF Grey List?

The FATF grey list is not a punishment, but rather a list of countries that have made a political commitment to address their deficiencies within a certain timeframe. While being on the list does not result in automatic sanctions or enhanced due diligence from other countries, it can lead to reputational damage and increased transaction costs for financial institutions dealing with grey-listed countries.

A Significant Achievement

Uganda’s removal from the grey list is a significant achievement, considering that it takes an average of four years for countries to exit the list. The country’s success has also prompted the European Commission to delete Uganda from its anti-money laundering blacklist.

But the Fight Is Far From Over

While this achievement is worth celebrating, it is important to note that the fight against terrorist financing and money laundering is far from over. The country still faces risks of financial flows from illicit mining and neighboring countries, which are all grey-listed except Rwanda. Corruption remains a significant challenge in Uganda, with proceeds of corruption often being laundered into or out of the economy.

Emerging Risks

Moreover, terrorist financing threats continue to evolve, with new forms of risk emerging constantly. For example, the use of virtual assets for terrorism financing is becoming increasingly common, and FATF is paying close attention to this trend.

Conclusion

Therefore, while Uganda’s removal from the grey list is a significant achievement, it is crucial that the country remains vigilant and continues to assess potential new risks, take necessary action, and view the fight against money laundering, terrorism financing, and proliferation financing as a critical effort to protect its financial system and economy.