A section of lawmakers have lashed out at Government for the sloppy nature with which they handled the threats of blacklisting Uganda for failure to put in legislations to combat money laundering and terrorism financing.
Leading the criticism was Paul Omara (Otuke County) who castigated Government for failing to comply with international warning that were issued two years ago and is now coming at the last minute to stampede Parliament in order to beat the 3rd September 2022 deadline of Uganda joining the blacklist.
He said, “The Executive must take full responsibility for being sloppy, for not being proactive. The last time they were given instructions to have this thing done was two years ago and now they are stampeding Parliament to work under duress at very limited time. There must be somebody there who understands the gravity of the problem.”
Omara added, “We are a very small country, it is a US$45 Billion economy, it can be cut off from the world financial system by not observing the anti-money laundering and anti-terrorism laws and making sure there is prudence on how we manage it.”
Sydney Asubo, Executive Director, Financial Intelligence Authority (FIA) informed Parliament that if Uganda doesn’t beat the deadline, the banking sector will be cut off from the international community and no single dollar will be transacted through Uganda’s Financial system.
He explained, “Countries that we have correspondences with, will be required to terminate them immediately. The consequences of terminations of correspondences relationships means that international transfers will not be effected, so it means those transactions will not go through, it means you will not be able to send even a dollar through the bank, maybe other alternatives.”
Asubo also added that the blacklist will also affect the Foreign Direct Investments (FDI) because investors will not want to associate with countries where bringing in and taking out money is difficult and probably choose to stay away.
This was during the consideration of the seven bills tabled by Attorney General, Kiryowa Kiwanuka including; The Trustees Incorporation (Amendment) Bill, 2022, The Anti-Terrorism (Amendment) Bill, 2022, The Anti-Money Laundering (Amendment) Bill, 2022, The Cooperative Societies (Amendment) Bill, 2022, The Partnerships (Amendment) Bill, 2022, The Companies (Amendment) Bill and The Insolvency (Amendment) Bill, 2022.
According to Government, the bills are aimed at ensuring that Uganda tightens its laws and regulations on anti-money laundering and anti-terrorism as per international obligations.
In January 2022, Asubo warned Parliament that Uganda risks being blacklisted by the Financial Action Taskforce (FATF) if the government does not tackle money laundering by May 2022, but the deadline was pushed to 3rd September owing to the Covid-19 pandemic that disrupted business around the world. Asubo informed the Finance Committee that the FATF maintains a watch list of countries that have significant shortfalls in tackling money laundering categorised under the grey list and the black list and Uganda made it to that list in May 2020 and although Government promised to address the specific issues within a given time frame, there were a number of issues are still outstanding thus prompting the FATF to warn Uganda that if these issues are not addressed, Uganda would be blacklisted.
