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Monday, June 26, 2017

PICTURES: #Uganda to defend against #MoneyLaundering, #Terrorism financing - #FATF


Uganda will in September host a group of international experts to try and convince them that the country’s financial system is well-regulated enough to combat money laundering and terrorism financing.
The visit is being organised on the back of threats that Uganda could be downgraded by the Financial Action Task Force (FATF) to the red zone of the organisations ratings, putting the country at the same level as pariah states such as North Korea and Iran.
Last week, the process leading to the September visit gathered momentum in Valencia, Spain, during the FATF meetings, where a team of Ugandan technocrats from the ministry of Finance and Bank of Uganda put up spirited defences of the Uganda financial system’s health. They said regulators are alert to block any laundered money.
“The FATF plenary has commended our efforts; improvements and endorsed recommendations for an on-site inspection visit to Uganda, which is scheduled for September this year. Their visit is intended to ascertain and confirm that our broad improved systems and financial processes function effectively and seamlessly,” a statement from the ministry of finance said at the weekend.
FATF is a policy-making body that sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system, Uganda has long taken issue with FATF’s assessment of its financial system. FATF lists Uganda among only seven countries that are just a level above the red zone occupied by Iran and North Korea.
Finance minister Matia Kasaija
On this list of high-risk and non-cooperative countries, Uganda is in the company of volatile states such as Syria, Iraq and Yemen. For Patrick Ocailap, the deputy secretary to the Treasury, who led Uganda’s delegation to Spain, FATF’s assessment of Uganda appears way off the mark.
“As we push forward to attaining modern and industrialized status as a country, we are obliged to avoid complacency and vulnerability but ensure that a clean, fraud and crime-free financial regime prevails in Uganda. We, so far, proved our commitment and have strong collaboration and support from key government institutions,” he said.
Uganda is part of the 17 members of the Eastern and Southern Africa Anti-Money Laundering Group, which is affiliated to FATF. The assessment from bodies such as FATF is crucial because it can determine the faith that international investors have in a country’s financial system and influence the decision where companies should park their money. A negative FATF rating, such as the one Uganda has, scares investors. 
Uganda has made efforts in combating laundered money. The creation of the Financial Intelligence Authority and the passing into law of the Anti-Money Laundering Act, are some achievements the country can claim.
However, many companies and business people have found a safe haven in the numerous confidentiality clauses they sign with Ugandan authorities, which shelve them from divulging information about their wealth and illicit revenues. Those clauses weaken the work of authorities and laws designed to fight money laundering. 
Uganda has also made progress in pushing for transparency and beneficial ownership, two key issues that were at the centre of discussions at the Spain meeting. The Uganda government, through the Inspectorate of Government, now requires public officials to list their assets and the beneficial owners in an online form.
Uganda is yet to consider the idea of allowing the public to access the list of declared assets by public officials, while there is still no separate register for beneficial ownership – making it hard to expose the identity of owners of hidden and ill-gotten wealth.
Also, state bodies like Uganda Revenue Authority, the Auditor General and the ministry of Energy continue to complain that they sometimes find it hard to audit company revenues because the information they request for is simply not divulged. The penalties for failure to disclose information are as painful as a slap on the wrist.
When the experts from the FATF visit in September, some of these questions might arise. Ocailap, however, said they will marshal support from all related parties to ensure that the experts are convinced.
THE OBSERVER






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