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There will be no change to Uganda’s status on the “grey list” due to the country’s inadequate steps to curb terrorism financing and money laundering.
In response to Uganda’s repeated requests for a longer deadline to comply, the Financial Action Task Force (FATF) has extended its compliance deadline to October, by four months. Except for two requirements, the government claims to have met all of them.
The FATF’s latest statement explained that, “The FATF expresses concern that Uganda failed to complete its action plan, which fully expired in May 2022. The FATF strongly urges Uganda to swiftly demonstrate significant progress in completing its action plan by October 2023 or the FATF will consider next steps if there is insufficient progress.”
The next steps may lead to Uganda joining the FATF’s blacklist which includes Myanmar (Burma), Iran, and North Korea. FATF’s Blacklist, which is also known as the “High-Risk and Non-Cooperative Jurisdictions” list, adversely affects a nation’s reputation and economic well-being. The nation’s reputation is damaged, foreign investment is reduced, and it appears to be financially isolated.
In its recommendations, FATF urged Uganda to address its strategic deficiencies by developing an action plan, to provide beneficial ownership, and basic information to competent authorities. Financial Intelligence Authority executive director, Sydney Asubo, said that his agency has enhanced and identified proceeds of crime, among other duties, to combat money laundering as well as terrorism financing. He said the issues should be resolved by the end of October.
Mr Asubo stated, “We are left with only two items out of the original 22 action items that Uganda agreed with FATF to implement. We are confident that by the new deadline of October, we will have addressed these two outstanding items, which are both partly addressed. We have done a lot of work between February 2023 when the previous statement was issued and the latest one issued in June 2023. Within those four months we cleared five issues and remained with only two. And even these two are partly addressed. It is on account of this good progress that Uganda was given an extension to October 2023. Expect good news then.”
Uganda had seven recommendations pending when the FATF set the June deadline in February. The FATF has narrowly avoided adding Uganda to its blacklist in the past. Staying on the FATF’s “grey list” may affect financial institutions that deal with Ugandan clients, transactions, or companies. This has led to increased scrutiny of Uganda by global financial institutions.
International financial institutions might be unable to lend Uganda money or finance as a result. In such circumstances, foreign investment may be discouraged since they perceive it as a higher risk.
UGANDA REMAINS ON FATF GREYLIST FOR FAILING TO CURB MONEY LAUNDERING