Financial Crime World

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Uganda’s Vulnerability to Trade-Based Money Laundering: A Major Concern

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Kampala, Uganda - Trade-based money laundering (TBML) is a growing concern in Uganda, with the country’s economy increasingly susceptible to this form of financial crime. According to a recent study by the FATF-Egmont Group, goods characterized by high-value, low-volume transactions, such as precious metals and second-hand textiles, are particularly vulnerable to TBML.

Top Exports Vulnerable to TBML

Some of the top exports vulnerable to TBML in Uganda include:

  • Coffee
  • Tea
  • Spices
  • Fish
  • Crustaceans
  • Tobacco
  • Edible oils
  • Waxes
  • Salt
  • Stones
  • Cement
  • Iron and steel
  • Cocoa
  • Misc. grains, seeds, fruit
  • Soaps and waxes
  • Raw hides, leather
  • Cereals
  • Sugar
  • Iron and steel articles
  • Machinery
  • Plastic products

These exports are often characterized by a lack of transparency in their supply chains, making it difficult to track their origins. This increases their susceptibility to TBML.

Gold and Petroleum Products: Most Vulnerable Goods

Gold and petroleum products are among the most vulnerable goods to TBML. Gold is Uganda’s biggest export, accounting for:

  • US$1.2 billion in 2019
  • US$1.8 billion in 2020
  • US$1.03 billion in 2021

However, reported gold production in the country is low, with only 40 kgs of gold produced between 2015 and 2020.

Petroleum products are also both Uganda’s top exports and imports, accounting for:

  • US$2.3 billion in exports during the period 2019-2021
  • US$4.5 billion in imports during the same period

Experts Warn of Serious Consequences

Experts warn that TBML poses a significant threat to Uganda’s economy, financial stability, and national security. “TBML can be used to finance illegal activities such as terrorism, human trafficking, and organized crime,” said [Name], an expert in the field.

Urgent Action Required

To combat this growing concern, the government of Uganda must take immediate action to strengthen its laws and regulations governing trade and commerce. This includes:

  • Increasing transparency in supply chains
  • Improving financial reporting
  • Enhancing cooperation between law enforcement agencies and the private sector

Stay Tuned for More Updates on This Developing Story

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