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Uganda to be removed from finance grey list
A cash transaction. Being blacklisted has affected Uganda’s foreign direct investment and caused delays in transfering of funds to and from the country. PHOTO/FILE
What you need to know:
- According to FATF, Uganda made key reforms in seven areas, including adopting a national Anti-Money Laundering law/ Countering the Financing of Terrorism; enhancing the use of mutual legal assistance and maintaining statistics and developing and implementing risk-based supervision of the financial and designated non-financial businesses and professions sectors.
Uganda is on course to be removed from the grey list of countries weak in laws on the prevention of anti-money laundering and terrorism financing after the government complied with international standards.
In a report by the Financial Action Task Force (FATF), a global body that tackles money laundering, terrorist and proliferation financing, Uganda has completed reforms of anti-money laundering and countering the financing of terrorism (AML/CFT) regulations.
“At its October 2023 plenary, the FATF made the initial determination that Uganda has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of AML/CFT reforms has begun and is being sustained and that the necessary political commitment remains in place to sustain implementation in the future,” the report states.
The FATF had threatened to blacklist Uganda if it didn’t reform its laws to comply with the standards.
If a country is on the grey list, it has weaknesses in detecting and preventing money laundering and terrorism financing and therefore a threat to the entire global financial system.
A listed country finds difficulties in carrying out financial transactions in and out of the country since the parties fear that they could be exposed to money laundering or similar financial crimes.
The executive director of the Financial Intelligence Authority (FIA), Mr Samuel Were Wandera, yesterday said they are now waiting for experts from FATF to carry out an onsite assessment to verify the recommendations in the first report and if they are satisfied, they would strike Uganda off the grey list.
“There are high hopes that the country will be removed from the grey list in February 2024 when the FATF body will meet again,” Mr Wandera said.
He said being blacklisted had affected Uganda’s foreign direct investment and caused delays in the transfer of funds from and to the country.
“When you are on a grey list, the financial transactions carried out in the country are delayed because of enhanced assessment of the payments. Some countries even bounce payments because they fear the risk associated with that country,” Mr Wandera said.
Mr Sydney Asubo, the outgoing executive director of FIA, who is the adviser to the Uganda Anti Money Laundering National Task force, said: “We have put in a lot of hard work over the last three years to address all the 22 action items agreed with FATF. We are now at the tail end of the process and look forward to the onsite visit by FATF so that we can demonstrate that the reforms we have put in place as a country are sustainable.”
The most significant implication to a country that is grey-listed is its reputational damage as its effectiveness in combatting financial crimes like corruption and money-laundering as well as terror financing are deemed to be below international standards.
Established in July 2014, the FIA is a government agency established by Parliament to monitor, investigate, and prevent money laundering in the country.
