Financial Crime World

Ugandan Economy Under Threat: New Report Uncovers Vulnerabilities of Trade-Based Money Laundering (TBML) and Its Impact on Uganda

July 19, 2023

Advocates Coalition for Development and Development (ACODE) and Global Financial Integrity (GFI) have teamed up to release an in-depth report on trade-based money laundering (TBML) and its profound consequences on Uganda’s economy. The collaborative study, titled “Trade-Based Money Laundering in Uganda,” sheds light on vulnerable sectors, challenges in combating TBML, and proposed measures to strengthen Uganda’s anti-money laundering regime.

Report Highlights

The report reveals sectors particularly susceptible to TBML, including:

  1. Import-export
  2. Extractive industries
  3. Agriculture

These sectors’ potential vulnerabilities serve as entry points for criminals to exploit.

Government’s Commitment to Counter TBML

The publication commends the Ugandan government’s commitment to countering TBML. The government’s efforts include implementing policies, legislation, and institutional frameworks. ACODE and GFI emphasize the importance of ongoing collaboration:

  • Government agencies
  • Financial institutions
  • Civil society organizations

Key TBML Risk Factors in Uganda

The report identifies several risk factors that make Uganda susceptible to TBML:

  1. Corruption
  2. Lack of coordination among stakeholders
  3. Weak oversight over Free Trade Zones
  4. Limited understanding of TBML and methods used

Recommendations

To address these challenges, ACODE and GFI propose recommendations:

  1. Awareness and training on TBML
  2. Implementing beneficial ownership laws and enforcing sanctions
  3. Increasing support and financing to frontline agencies
  4. Data sharing and collaboration among stakeholders

Impact of Illicit Financial Flows

Illicit Financial Flows (IFFs) have become a significant obstacle in the global development agenda, robbing countries of resources needed for development:

  • Uganda loses over UGX.2 trillion annually
  • Losses linked to corruption and impunity
  • TBML becoming a prevalent method for laundering funds

The Sophistication of TBML

TBML is a complex form of money laundering, disguising proceeds of crime through legitimate trade transactions. It is challenging for financial institutions and customs authorities to detect.

Conclusion

ACODE and GFI thank the individuals, institutions, and government agencies that contributed to the study. They aim to stimulate dialogue and action against TBML in Uganda with the report’s insights and recommendations.