WHAT ARE THE
Money laundering and terrorism financing laws in Uganda?
In Uganda, money laundering and terrorism financing are serious offences and are governed by the Anti-Money Laundering Act, 2013 (as amended) and the Anti-Terrorism Act, 2002. The Financial Intelligence Authority (FIA) is responsible for monitoring and enforcing compliance with these laws, ensuring that financial institutions and other reporting entities adhere to anti-money laundering and counter-terrorism financing (AML/CTF) regulations.
WHAT ARE THE
Key obligations reporting entities have under the laws of Uganda?
The key obligations under the AML/CTF laws in Uganda include:
- Customer Due Diligence (CDD) – Banks, financial institutions, insurance companies, real estate agents, and other reporting entities must conduct CDD to verify customer identities, determine beneficial ownership, and assess risk levels. Enhanced due diligence is required for high-risk customers.
- Reporting Suspicious Transactions – Reporting entities are required to submit Suspicious Transaction Reports (STRs) to the Financial Intelligence Authority (FIA) if they detect transactions that may indicate money laundering, terrorism financing, or other illicit activities.
- Record-Keeping – Entities must maintain records of transactions and customer information for at least ten years to ensure compliance with regulatory requirements. These records should be available for review by authorities.
- Compliance Programs – Covered entities must implement AML/CFT policies, internal controls, and risk management frameworks. This includes staff training, independent audits, and appointing a compliance officer to oversee adherence to AML/CFT regulations.
- Politically Exposed Persons (PEPs) – Institutions must apply enhanced due diligence measures for PEPs, including gathering additional background information, monitoring transactions more closely, and obtaining senior management approval for business relationships with such individuals.
WHO ARE THE
ML/TF regulators in Uganda and what functions do they perform?
In Uganda, the regulators responsible for overseeing and enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) measures are primarily:
- Financial Intelligence Authority (FIA) – The FIA is the primary regulatory body responsible for preventing and combating money laundering and terrorism financing in Uganda. It receives, analyses, and disseminates financial intelligence and ensures compliance with AML/CTF regulations.
- Bank of Uganda (BoU) – The BoU regulates and supervises financial institutions, ensuring that banks and other regulated entities implement effective AML/CTF measures. It issues guidelines and enforces compliance within the banking sector.
- Uganda Revenue Authority (URA) – The URA is responsible for tax collection and investigating financial crimes, including money laundering linked to tax evasion.
- Capital Markets Authority (CMA) – The CMA oversees Uganda’s securities and capital markets, ensuring that investment firms comply with AML/CTF regulations to prevent financial crimes.
- Insurance Regulatory Authority of Uganda (IRAU) – The IRAU supervises the insurance sector, ensuring that insurance companies comply with AML/CTF laws and implement necessary risk controls.
- Directorate of Public Prosecutions (DPP) – The DPP prosecutes criminal cases related to money laundering and terrorism financing, working closely with law enforcement and regulatory agencies.
Uganda is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and cooperates with international organisations such as the Financial Action Task Force (FATF) to enhance its AML/CTF framework.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
The regulated industries and sectors in Uganda subject to AML and CTF regulations include, but are not limited to:
Uganda's AML/CTF framework extends to both financial institutions and designated non-financial businesses and professions (DNFBPs), ensuring a comprehensive approach to combating financial crime.
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
The penalties for non-compliance with AML/CTF laws in Uganda are significant and are governed primarily by the Anti-Money Laundering Act, 2013 (as amended). The key penalties include:
- Administrative Penalties – The Financial Intelligence Authority (FIA) has the authority to impose administrative fines on entities that fail to comply with AML/CTF regulations. This can include monetary fines, license suspensions, and regulatory restrictions on financial operations.
- Criminal Penalties – Individuals or businesses found guilty of money laundering offences face heavy fines, with penalties reaching UGX 2 billion (approximately $540,000) or more, depending on the severity of the violation.
- Imprisonment – Individuals convicted of money laundering or terrorism financing may face a prison sentence of up to 15 years, with harsher penalties for those involved in organised crime or large-scale financial fraud.
- Asset Freezing and Forfeiture – Authorities can freeze, seize, and confiscate funds, properties, or any other assets linked to money laundering or terrorist financing activities.
Uganda’s enforcement of AML/CTF laws is overseen by the Financial Intelligence Authority (FIA), in collaboration with the Uganda Police Force, the Directorate of Public Prosecutions, and other financial regulators.
WHAT ARE THE
Largest fines for non-compliance with AML/CTF laws?
Ugandan authorities have also taken enforcement action against financial institutions and other businesses for failing to comply with AML/CTF laws. Some of the largest fines include:
- Stanbic Bank Uganda – In 2022, Stanbic Bank Uganda was fined UGX 100 million (approximately $26,500) by the Financial Intelligence Authority (FIA) for failing to comply with AML requirements, including deficiencies in reporting suspicious transactions.
- Dfcu Bank – In 2021, Dfcu Bank faced a fine of UGX 200 million (approximately $53,000) for breaches related to AML/CTF compliance, particularly weaknesses in due diligence and failure to report large cash transactions.
- Equity Bank Uganda – In 2023, Equity Bank was fined UGX 150 million (approximately $40,000) for failing to implement adequate AML controls and not properly screening high-risk transactions.
- Mobile Money Operators – In recent years, Uganda’s FIA has also fined several telecom companies for failing to comply with AML regulations in their mobile money services. These fines have reached up to UGX 500 million (approximately $132,000) for weaknesses in monitoring transactions and reporting suspicious activity.
Uganda’s Financial Intelligence Authority (FIA), in collaboration with the Bank of Uganda (BoU) and law enforcement agencies, continues to take enforcement actions against financial institutions and other entities that fail to meet AML/CTF compliance requirements.