Wednesday, June 19, 2024
Home > Banking > Criminals Using Mobile Money Platform For Laundering – FIA

Criminals Using Mobile Money Platform For Laundering – FIA

The high daily transaction limit for mobile money transactions is fuelling money laundering in the country, according to Sydney Asubo, the Executive Director of the Financial Intelligence Authority (FIA).

The electronic mobile service allows users to store, send and receive money on their phones. In Uganda, the service allows customers to load up to 15 million Shillings on their phones and to withdraw up to seven million shillings in one go, from the MTN service. Airtel and other service providers limit the daily withdrawals to between four and five million Shillings every day.

At least 23.4 million Ugandans had registered for mobile money services across all networks as of December 2017, according to Bank of Uganda’s Annual Supervision Report.

Collectively, the transactions on the mobile money platforms stood at 63.1 trillion Shillings, a figure that doubles the national budget.

Now the Financial Intelligence Authority fears that the use of cellphones as virtual wallets or personal ATMs is aiding criminals to conceal the origins of illegally obtained money, while many others are using profits from illegal activities to invest in real estate and acquire assets.

Currently, the telecommunication companies are responsible for creating their own daily transaction limits as in line with the guidelines set by Bank of Uganda in 2013, But Asubo says the law needs to be revised to create a ceiling on daily transactions.

Asubo says that because transactions are made via mobile phones and text messages, there’s usually no way to trace them, let alone secure evidence for prosecutions.

Asubo was speaking at the launch of the Money Laundering and Terrorist Risk Assessment report released today by the Financial Intelligence Authority in Kampala. The National risk assessment report highlights risk in Uganda for both money laundering and terrorist financing.  The findings show very high risk for money laundering and medium high risk for terrorist financing.

Asubo said that money generating areas within the country for money laundering that were found include corruption both in public and private sectors, fraud, tax crimes and smuggling of counterfeit products.

Financial analysts fear that Uganda’s legal regime is too weak to address financial fraud and money laundering, especially if transactions are done through the mobile money networks, where customers often need little in the way of identification.

“The whole process often bypasses a country’s financial reporting system. That makes it almost impossible for authorities to monitor m-payments, even if they had the expertise, according to earlier publications by a John Cassara, an expert in anti-money laundering and terrorist financing.


Leave a Reply

Your email address will not be published. Required fields are marked *