Uganda’s Money Laundering Risk Assessment: External Threat Rises
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Kampala - A New Report Reveals Medium-High Risk of Money Laundering and Terrorist Financing
A recent report by the National Reporting Authority (NRA) has highlighted that Uganda faces a medium-high risk of money laundering (ML) and terrorist financing (TF) from external threats. The assessment covers the period 2017 to 2021 and indicates that crimes committed outside the country’s borders pose a significant threat.
External Threats: A Major Concern
The report notes that available statistics on money laundering investigations, requests for information, and Mutual Legal Assistance (MLA) requests received from foreign jurisdictions during the assessment period point to a medium-high risk of external threats. The main predicate offenses linked to drug trafficking, wildlife crimes, human trafficking, and smuggling of precious metals and stones contribute to this risk.
Trade Arrangements: A Significant ML/TF Risk
Uganda’s trade arrangements with its major trading partners, including Kenya, India, China, United Arab Emirates, South Sudan, Democratic Republic of Congo, and Tanzania, also pose a significant ML/TF risk. The country’s reliance on seaports in Mombasa and Dar-es-Salaam, Entebbe airport, and various border points for exporting and importing goods makes it vulnerable to smuggling and illegal crossings.
Exports and Imports: A High Risk of Trade-Based Money Laundering
The report highlights that six countries - United Arab Emirates, Kenya, South Sudan, Democratic Republic of Congo, China, and India - accounted for approximately 50% of Uganda’s exports worth USD 7,289.52 million, while these same countries also account for around 68.6% of Uganda’s trade imports worth USD 16,024.9 million. “This exposes Uganda to a high risk of trade-based money laundering,” said an official at the NRA.
National ML Vulnerability
Uganda’s national ML/TF vulnerability is a combination of its combating ability and sectorial vulnerabilities, including those of the financial sector, designated non-financial businesses and professions (DNFBPs), financial inclusion products, and environmental crimes. The report notes that despite having some mitigation mechanisms in place, there are significant weaknesses in these areas.
Recommendations
To address these vulnerabilities, the NRA recommends:
- Strengthen anti-money laundering controls
- Improve combating ability of regulatory and supervisory bodies
- Enhance cooperation with foreign jurisdictions
- Address sectorial vulnerabilities in financial sector, DNFBPs, financial inclusion products, and environmental crimes
The full report can be accessed on the NRA website.
Source:
National Reporting Authority (NRA) Report for Uganda 2023