Financial Crime World

Terrorist Financing in Uganda: Country Makes Significant Progress, Removed from Grey List

Kampala - In a major breakthrough, Uganda has been removed from the Financial Action Task Force (FATF) “Grey List” after making significant progress in combating money laundering and terrorist financing.

FATF Acknowledges Uganda’s Efforts

The FATF, an international organization that sets global standards for combating money laundering and terrorist financing, acknowledged Uganda’s efforts to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regimes.

Legislative Changes Aimed at Enhancing Transparency and Regulatory Compliance

In response to the urgency to enhance Uganda’s reputation and evade potential blacklisting by the FATF, the government introduced legislative changes aimed at enhancing transparency and regulatory compliance within the financial systems. Key laws were amended, including:

  • Companies (Amendment) Act 2022
  • Partnership (Amendment) Act 2022
  • Trustees Incorporation (Amendment) Act 2022

These amendments require entities such as partnerships, trusts, and companies to maintain comprehensive registers of their beneficial owners, including:

  • Names
  • Postal addresses
  • National identification numbers
  • Dates of entry and cessation as beneficial owners
  • Any other details as may be prescribed by regulations

Companies are also required to maintain registers containing beneficial ownership information and promptly notify the registrar of companies through the filing of a beneficial ownership form at the Uganda Registration Services Bureau (URSB). Non-compliance with these regulations carries substantial penalties, including:

  • Refusal of subsequent filings on the company file
  • Statutory fines

Implications for Uganda’s Financial Landscape

Uganda’s removal from the Grey List marks a significant milestone in the financial landscape, ushering in an era defined by:

  • Heightened regulatory compliance
  • Enhanced transparency

This achievement underscores Uganda’s commitment to adhering to international AML/CTF standards, paving way for broader access to financial markets and increased foreign investment inflows.

The implementation of risk-based supervision of financial institutions and designated non-financial businesses and professions enables the country to:

  • Identify and mitigate potential risks more effectively
  • Alleviate compliance burdens for financial institutions and businesses
  • Foster investor confidence

The well-established and functioning AML/CFT regime contributes to the overall stability of the financial system, ensuring that it is resilient to illicit activities such as money laundering and terrorist financing.