Terrorist Financing Threat Lingers in Uganda Despite Progress in Compliance Efforts

Uganda has made significant strides in addressing technical compliance deficiencies related to anti-money laundering and combating the financing of terrorism (AML/CFT), but still faces challenges that put it at risk of being exploited by terrorist organizations.

Challenges Remain

Despite improvements, Uganda’s financial system remains vulnerable to terrorist financing. The country’s porous borders and lack of effective border control make it an attractive route for terrorists looking to move funds across the region.

Key Compliance Deficiencies

Uganda initially faced several technical compliance deficiencies, including:

• Issues with monitoring and reporting suspicious transactions
• Difficulty in identifying and verifying customers
• Inadequate customer due diligence

Progress Made

Recent assessments indicate that Uganda has made significant progress in addressing these shortcomings. Specifically:

• Recommendations 1, 7, 18, and 24 were upgraded from “non-compliant” to “partially compliant”
• Recommendation 27 was previously rated non-compliant but is now considered fully compliant

Continued Monitoring

Uganda remains in the enhanced follow-up category and will continue to be closely monitored by international organizations to ensure that its AML/CFT measures remain effective.

International Partners’ Urging

International partners are urging Uganda to:

• Prioritize AML/CFT efforts
• Take additional steps to strengthen its financial sector
• Prevent the misuse of its financial system by terrorist organizations

The Way Forward

Uganda has committed to continuing to improve and implement its AML/CFT measures, and will provide regular updates to the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). The international community will be closely watching Uganda’s progress in this area in the coming months and years.