Ugandan Financial Crimes: A Deep Dive into Trade-Based Money Laundering and Its Impacts

New Findings on Trade-Based Money Laundering (TBML) in Uganda

July 19, 2023

Advocates Coalition for Development and Development (ACODE) and Global Financial Integrity (GFI) have recently released a joint publication titled “Trade-Based Money Laundering in Uganda.” In this article, we will summarize the key findings and recommendations from the study.

Sectors Prone to TBML and Identified Vulnerabilities

The study identifies several sectors vulnerable to TBML:

Import and export
Extractive industries
Agriculture

By pinpointing these sectors’ vulnerabilities, ACODE and GFI aim to increase awareness among stakeholders, policymakers, and law enforcement agencies.

Government’s Efforts to Combat TBML

Despite facing challenges, authorities in Uganda are making progress in addressing TBML:

Implementation of policies
Legislation
Institutional frameworks

ACODE and GFI recognize these efforts and stress the importance of ongoing collaboration between stakeholders to create a comprehensive and effective anti-money laundering response.

Risk Factors Enabling TBML in Uganda

The publication also highlights factors that enable TBML in Uganda:

Corruption
Lack of coordination
Inadequate oversight in Free Trade Zones
Limited consciousness of TBML

To tackle these challenges, the authors offer recommendations:

Raising awareness and providing training on TBML
Implementing beneficial ownership laws
Data sharing and coordination
Increasing support and funding for frontline agencies

The Effects of Illicit Financial Flows (IFFs) on Global Development

Experts predict that Illicit Financial Flows (IFFs) will continue to hurt the global development agenda by siphoning billions of dollars from countries like Uganda, which could otherwise finance sustainable development.

Uganda loses over UGX.2 trillion annually due to IFFs, with TBML being a primary method.

Conclusion

Trade-Based Money Laundering (TBML) poses a significant threat to the financial systems and economy of Uganda as a whole, given its role as a vital player in international trade. ACODE and GFI’s study provides an in-depth examination of the sectors most exposed to TBML in Uganda and demonstrates the methodologies employed by money launderers and the economic destabilizing effects.

The authors hope that the findings will foster constructive dialogue, encourage collaborative actions, and serve as a vital resource for policymakers, practitioners, and stakeholders seeking to combat TBML in Uganda.