Financial Crime World

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Financial Crime on the Rise: What is Financial Crime in Uganda?

A new joint publication by Advocates Coalition for Development and Accountability (ACODE) and Global Financial Integrity (GFI) has shed light on the vulnerability of certain sectors to Trade-Based Money Laundering (TBML) in Uganda. The report, titled “Trade-Based Money Laundering in Uganda”, highlights the alarming rate at which financial crime is affecting the country’s economy.

Sectors Susceptible to TBML

The study identifies several sectors that are particularly susceptible to TBML, including:

  • Import and export
  • Extractive industry
  • Agriculture

These sectors serve as entry points for criminals to exploit the trade system for illicit financial activities. Corruption, lack of coordination among stakeholders, relaxed oversight over Free Trade Zones, and limited understanding of TBML and techniques used are some of the key risk factors identified in the report.

Recommendations

The Ugandan government has made commendable efforts to combat TBML, but more needs to be done. The joint publication recommends:

  • Raising awareness and providing training on TBML among private and public actors
  • Implementing beneficial ownership laws
  • Enforcing sanctions systems
  • Promoting data sharing and coordination among stakeholders
  • Increasing support and funding to frontline agencies

Illicit Financial Flows

Illicit Financial Flows (IFFs) have been recognized as a major challenge to Uganda’s development agenda. The country loses over UGX 2 trillion annually to IFFs, which hinders economic growth and development. TBML is one of the most sophisticated methods of money laundering, making it difficult to detect by financial institutions and customs authorities.

Threat to Financial System

The report emphasizes that TBML poses a significant threat to the integrity of Uganda’s financial system and its economy as a whole. It is imperative for policymakers, practitioners, and stakeholders to work together to combat this form of financial crime effectively.

Conclusion

ACODE and GFI express their gratitude to all those who contributed to the research and insights presented in the publication. They hope that the findings will stimulate productive dialogue, encourage collaborative actions, and serve as a valuable resource for those invested in combating TBML in Uganda.