Financial Crime World

Uganda’s Anti-Money Laundering Laws and Regulations Face Scrutiny

Kampala, Uganda - A recent assessment of Uganda’s anti-money laundering (AML) laws and regulations has revealed significant shortcomings in the country’s efforts to combat financial crimes.

Shortcomings in Uganda’s AML Framework

The Mutual Evaluation Report, conducted by the Financial Action Task Force (FATF), a global standard-setter for AML policies, highlighted several areas where Uganda falls short. The report assigned ratings of “compliant,” “largely compliant,” “partially compliant,” and “non-compliant” to various aspects of Uganda’s AML framework.

Non-Compliant Areas

  • Risk Assessment: Uganda has failed to adequately assess risks and apply a risk-based approach (R.1)
  • Asset Confiscation: The country has not established an effective system for confiscating and freezing assets linked to money laundering offenses (R.4)
  • Financial Institution Regulation: Uganda is deemed non-compliant in the regulation and supervision of financial institutions (R.26)
  • Supervisor Powers: The country lacks sufficient powers for supervisors (R.27)
  • International Cooperation: Uganda has been deemed non-compliant in international cooperation on mutual legal assistance (R.37)

Partly Compliant Areas

  • DNFBP Regulation: Uganda demonstrated partial compliance in the regulation and supervision of designated non-financial businesses and professions (DNFBPs) (R.28)
  • Law Enforcement Powers: The country showed partial compliance in the powers of law enforcement and investigative authorities (R.31)

Compliant Areas

  • National Cooperation: Uganda received a compliant rating for national cooperation and coordination (R.2)
  • Money Laundering Offense: The country demonstrated a compliant rating for money laundering offense (R.3)
  • Non-Profit Organization Due Diligence: Uganda was found to be compliant in customer due diligence requirements for non-profit organizations (R.22)

Recommendations

The FATF has recommended that Uganda take immediate action to address the identified shortcomings in its AML framework. This includes:

  • Strengthening risk assessment procedures
  • Improving customer due diligence requirements
  • Enhancing international cooperation on mutual legal assistance

Uganda’s government has acknowledged the report’s findings and pledged to implement the necessary reforms to improve its AML framework.

Key Findings:

  • Compliant ratings: National cooperation and coordination (R.2), money laundering offense (R.3), regulation of non-profit organizations’ customer due diligence (R.22)
  • Largely compliant ratings: None
  • Partially compliant ratings: Regulation and supervision of DNFBPs (R.28), powers of law enforcement and investigative authorities (R.31), mutual legal assistance (R.37)
  • Non-compliant ratings: Risk assessment and risk-based approach (R.1), confiscation and freezing measures (R.4), regulation and supervision of financial institutions (R.26), powers of supervisors (R.27), international cooperation on mutual legal assistance (R.37)