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Uganda is facing the risk of being added to a global blacklist for money laundering and terrorism financing as the deadline to address its 16 issues approaches.
The Paris-based financial watchdog FATF (Financial Action Task Force) pointed out 16 issues in Uganda’s AML/CFT measures. In 2020, the regulator placed Uganda on the grey list along with other countries that have deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing.
Any country that appears on the grey list including Uganda and 22 other countries, is automatically placed on the blacklist of the European Union and the UK.
Earlier this week, a commercial bank whose subsidiary in the neighbouring DR Congo came under scrutiny for money laundering exited the Ugandan market.
This means transactions originating from Uganda or made through Uganda’s financial system and cash from or to the country, face more scrutiny by the international systems, which leads to delays in concluding the business transactions.
Addressing a news conference on Thursday, executive director of Financial Intelligence Authority (FIA) Sydney Asubo revealed that the country will likely meet the demands of the watchdog and be removed from the grey-list.
“It is on this basis that countries submit to what we call periodic mutual evaluations. An assessment is done to determine how the country is compliant with two categories. First of all, do you have the laws required to fight? the second issue is to determine how effectively do you apply [the law] that’s why they ask questions how many convictions do you have? How many prosecutions? How much money have you confiscated from criminals? We have addressed six of those issues and 16 were pending, they will be more improvements.”
Uganda was last assessed in 2016 and a number of non-compliant issues were identified.