Uganda’s Anti-Money Laundering and Know-Your-Customer Regulations: A Guide to Compliance
KAMPALA, UGANDA - In a bid to combat money laundering and terrorist financing, the government of Uganda has introduced stringent regulations for financial institutions and businesses operating in the country. Shufti Pro, a leading provider of anti-money laundering (AML) and know-your-customer (KYC) solutions, has released a comprehensive guide to help businesses navigate these regulations.
Identity Verification
According to the guidelines, identity verification is not a one-time process, but rather a recurring requirement in multiple instances. Financial institutions and businesses must verify the identity of their customers at various stages, including:
- Onboarding: Verifying customer identities during the initial onboarding process.
- Transaction monitoring: Monitoring transactions for suspicious activity and verifying customer identities as needed.
- High-risk situations: Verifying customer identities in high-risk situations, such as large or unusual transactions.
The documents required for identity verification include:
- Identity card
- Driving license
- Passport
Address verification requires proof of address through:
- Utility bills
- Bank statements
- Government-issued documents issued within the last three months
Timing of Verification
The timing of identity verification depends on the business requirements and risk assessment. For instance:
- Financial institutions must verify customer identities when onboarding new customers and at regular intervals thereafter.
- In cases where transactions exceed certain monetary thresholds, identity verification becomes more frequent.
Politically Exposed Persons (PEPs) and Enhanced Due Diligence
As per Uganda’s regulations, businesses are required to identify PEPs and conduct enhanced due diligence (EDD) measures. Shufti Pro offers an AML screening service that helps businesses detect:
- PEPs
- Compromised individuals
- Sanctioned entities
The service screens individuals against watchlists of global regulatory authorities, foreign and domestic databases, and compromised PEPs. It also highlights the category of the PEP based on the degree of risk they pose and any immediate family members or close associates.
Reliance on External Services
Uganda’s regulations allow businesses to seek the services of third-party providers for due diligence measures. However, businesses remain liable for:
- Maintaining all compliance records
- Fulfilling AML and KYC obligations
Record Retention
Finally, businesses are required to retain data for at least ten years as part of their AML and KYC obligations. This includes collecting necessary information from third-party providers without undue delay.
By following these guidelines, financial institutions and businesses operating in Uganda can ensure compliance with the country’s anti-money laundering and know-your-customer regulations, thereby mitigating the risks associated with money laundering and terrorist financing.