Financial Crime World

Title: Trade-Based Money Laundering in Uganda: A Hidden Threat to the Economy

Date: July 19, 2023

Advocates Coalition for Development and Environment (ACODE) and Global Financial Integrity (GFI) have jointly published a comprehensive report entitled “Trade-Based Money Laundering in Uganda.” The groundbreaking study offers valuable insights into the extent, impact, and risk factors of Trade-Based Money Laundering (TBML) in Uganda.

Key Findings

  • Vulnerable sectors: import and export, extractive industries, agriculture
  • Commitment from the government
  • Rampant corruption, lack of coordination, insufficient understanding
  • Recommendations to enhance Uganda’s anti-TBML efforts

Sectors Vulnerable to TBML

The report explores sectors most susceptible to TBML, including:

  1. Import and export industry: High volume of transactions and weak controls
  2. Extractive industries: Lack of transparency and high value, often cash transactions
  3. Agriculture: Informal sector and limited oversight

Government’s Response

Uganda’s government has expressed its commitment to combating TBML, with various policies, legislation, and institutional frameworks in place.

Key Risk Factors

  1. Rampant corruption
  2. Limited coordination among stakeholders
  3. Lax oversight in Free Trade Zones
  4. Insufficient understanding of TBML techniques

Recommendations

ACODE and GFI’s recommendations focus on enhancing Uganda’s resilience against TBML:

  1. Awareness and training: Raise awareness and provide training to both public and private sector actors.
  2. Beneficial ownership laws: Implement and enforce beneficial ownership laws.
  3. Data sharing and coordination: Implement data sharing and coordination mechanisms among stakeholders.
  4. Support for frontline agencies: Increase support and funding to frontline agencies.

TBML: A Global Challenge

Illicit Financial Flows (IFFs) amount to an estimated annual loss of over UGX.2 trillion for Uganda. TBML is a significant portion of IFFs and involves disguising proceeds of crime through legitimate trade transactions.

Threats and Consequences

TBML poses significant threats to Uganda’s financial system and overall economy and undermines development efforts. GFI and ACODE express their gratitude to the individuals, institutions, and government agencies for their contributions and insights.

This publication aims to foster productive dialogue, encourage collaborative actions, and serve as a valuable resource for policymakers, practitioners, and stakeholders dedicated to combating TBML in Uganda.