Financial Crime World

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Uganda Regulates Customer Identification: What You Need to Know

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In a bid to combat money laundering and terrorism financing, the Ugandan government has introduced regulations that require businesses to verify the identity of their customers. This new requirement aims to ensure that businesses are taking adequate measures to prevent illegal activities and maintain transparency in their operations.

Who Does it Affect?

The regulations apply to all businesses that provide financial services or products, including:

  • Banks
  • Financial institutions
  • Money service providers
  • Other entities that engage in transactions involving funds

What Information is Required?

To establish the identity of a customer, businesses must obtain specific information, which varies depending on the type of customer. For natural persons who are citizens or residents of Uganda, businesses must obtain:

  • National identification card or alien’s identification card
  • Residential address and contact details (telephone number, fax number, postal address, and email address)
  • Employer’s introductory letter or a senior government official’s attestation to their identity
  • Tax identification number, where applicable
  • Details on occupation, employment, source of income, nature and location of business activity, and sample signature and thumb print

For foreign nationals, businesses must obtain:

  • Name, residential address, telephone number, postal address, and email address
  • Date and place of birth
  • Nationality
  • Passport details
  • Visa status
  • Tax identification number, where applicable
  • Signature and thumb print

Additional Requirements

Businesses may require additional information to verify the identity of a customer, including:

  • Utility bills (electricity, water, etc.)
  • Details on occupation or employment
  • Source of income
  • Nature and location of business activity, including a lease or tenancy agreement for business premises
  • Income tax identification number, where applicable
  • Written references from acknowledged persons attesting to the customer’s identity

Verification Process

Businesses must verify the information provided by customers through various means, including:

  • Independent verification with government agencies (e.g., National Identification and Registration Authority, Uganda Citizenship and Immigration Control Board)
  • Contacting banks or financial institutions in the customer’s country of origin or residence
  • Using other independent and reliable sources

Penalties for Non-Compliance

Businesses that fail to comply with these regulations may face penalties, including:

  • Fines
  • Imprisonment

Conclusion

The new regulations aim to ensure that businesses are taking adequate measures to prevent money laundering and terrorism financing. By verifying the identity of their customers, businesses can maintain transparency in their operations and reduce the risk of illegal activities.