What removal of Uganda from FATF  grey list means

The FATF plenary last Friday removed Uganda, Barbados, Gibraltar, and the United Arab Emirates from its list of countries under increased monitoring. FATF congratulated them for plugging the gaps in anti-money laundering (AML) and combating the financing of terrorism (CFT) that were previously identified during their evaluations.

FATF defines the grey list as a catalogue of countries under increased monitoring but they have made a commitment to address strategic deficiencies regarding money laundering, terrorist financing, and proliferation financing in an agreed period and are subject to increased monitoring.

“These jurisdictions had committed to implement an action plan to swiftly resolve the identified strategic deficiencies within agreed timeframes. These countries will no longer be subject to the FATF’s increased monitoring process,” the statement said. 

The statement said the reprieve comes after a successful on-site visit to countries, which will now work with the FATF-Style Regional Body to continue strengthening their AML/CFT/CPF (countering proliferation of financing) regimes. 

Mr Samuel Were Wandera, the executive director of Uganda’s Financial Intelligence Authority (FIA), said the exit protects Uganda’s reputation globally as a country with a sound and robust AML/CFT/CPF regime. 

He said the clearance now reduces the financial transaction turnaround time, builds investor confidence, reduces the cost of doing business, enhances access to international markets and credit, and boosts the government’s socioeconomic transformation efforts. 

“The Government of Uganda has been actively working to strengthen the effectiveness of its AML/CFT regime and to implement the action plan agreed with FATF, which comprises 22 action items. During this period, Uganda initiated key AML/CFT reforms intended to improve the robustness of our systems to deal with ML/TF crimes,” he said. 

Mr Wandera said Uganda is committed to consolidating the achievements attained during this period and strengthening her AML/CFT/CPF regime, which shall be achieved through strengthening the National Task Force to effectively coordinate an all-government approach to these crimes, increased engagements with the private sector to aggressively embrace the various AML/CFT measures including dealing with the identified risks, as well as strengthening the capacity of relevant institutions involved in the fight against ML/TF crimes. 

“Indeed, Uganda remains fully committed to increasing its compliance to the FATF international standards and this is evidenced by the strong political commitment to improving our AML/CFT framework,” he said. 

Kenya, Tanzania, the DR Congo, South Sudan, South Africa, Senegal, Nigeria, Namibia Mozambique, Mali, Cameroon, and Burkina Faso were added to the list of countries being closely monitored. 

Mr Wandera said the decision to remove Uganda from the grey list stems from the significant progress and political commitment demonstrated during the physical onsite inspection last December by the FATF team. 

Ms Evelyn Anite, the State minister for Investment and Privatisation, greeted the news with excitement, saying this offers a good opportunity for the country to attract more foreign direct investment. 

“One of the reasons we’re on that grey list was that many companies were registered, but FATF wanted us to ensure we know who the real owners of those companies are. URSB, which is the body that registers all companies that come to do business here, has effectively been able to verify all those companies and it’s great for us,” she said. 

Ms Anite added: “We’re very excited about this because we will be able to get investor confidence and see the reason why they should invest in Uganda. This just improves our already good investment climate.” 

She said with the removal from the grey list, more investors will come to invest in the country and this will create more opportunities for the economy. 

“So for me, this is very good that we now got an opportunity to know all our investors and the beneficial owners of all the companies that they’re having and everything,” Ms Anite said. 

She said the government would now work hard to ensure Uganda does not slip back to the grey list. 

“All the relevant agencies and departments will have to up their game and stay on course ,” Ms Anite said. 

About the Grey, and Black financial Lists
The Financial Action Task Force (FATF) defines the grey list as a catalogue of countries under increased monitoring but they have made a commitment to address strategic deficiencies regarding money laundering, terrorist financing, and proliferation financing in an agreed period and are subject to increased monitoring. 

The Black List catalogues countries are thought to pose a high risk of money laundering, terrorist financing, and proliferation financing, due to their significant strategic deficiencies in that regard. 

Uganda’s reforms to exit List
Among others, Uganda adopted reforms which included adopting a national AML/CFT/CPF strategy; enhancing the use of Mutual Legal Assistance and maintaining comprehensive statistics; developing and implementing risk-based supervision of the financial and DNFBP sectors; and ensuring law enforcement agencies and judicial authorities apply the money laundering offence consistent with the identified risks and establishing procedures to trace and seize proceeds of crime. 
      
Other reforms included enhancing the ability of the law enforcement agencies to conduct terrorism financing investigations and prosecutions; implementing proliferation financing-related targeted financial sanctions, and undertaking actions to strengthen the capacity of our relevant AML/CFT ministries departments and agencies (MDAs) to implement these reforms effectively now and in the future. 

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