Uganda to Be Blacklisted Over Laundering
The Financial Intelligence Authority has warned that Uganda will face financial sanctions if it does not expedite action plans to combat money laundering and terrorism financing in order to protect the integrity of financial systems.
Uganda was placed on the gray list (watch list) in 2017, but FIA says some safeguards against money laundering have not been put in place as the international Financial Action Task Force (FATF) moves to place Uganda on the BLACKLIST in May.
While facing the parliament’s committee of finance today, the executive director of Financial Intelligence Authority (FIA) Sydney Asubo dropped a warning that Uganda is on a verge of being blacklisted by the Financial Action Task Force (FATF), an international organization against money laundering if it does not work on deficiencies in the regimes to counter money laundering, proliferation financing, and terrorist financing.
Asubo noted that although the financial intelligence Authority has done its part by establishing safeguards to curtail money laundering, other sister agencies like the ministry of internal affairs, the ministry of foreign affair and the ministry of justice are still ragging behind to complete their action plans within the timeframe given by FATF.
Uganda is currently on the gray list which is one step away from the blacklist. The black list comes with damaging consequences to the economy including a surge in the cost of trade, loss of trade partners; curtail foreign investments, making it difficult for the country to access global capital markets among other difficult scenarios. Asubo warned that Uganda must race to avoid financial watchdog sanctions.
FIA has also told the committee of finance that due to weak policies and laws against corruption in Uganda, most corrupt officials are investing their illicit accumulated wealth in Uganda, especially in the real estate sector.
FIA has also revealed that it has saved trillions of taxpayers’ money since it was tasked by the government to carry out due diligence on investors which come to Uganda to partner with the government. Asubo noted that many investors who come to Uganda have been found quack that only come to dupe and fleece government.
However, with that mandate, the financial intelligence authority is grappling with a funding gap of12.2bn shillings, after it has been allocated only 16.7bn shillings in the 2022/2023 financial year budget.