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The International Monetary Fund (IMF) has told Bank of Uganda (BoU) to strengthen the fight against money laundering if the country is to get off the Financial Action Task Force grey list.
In June, the Financial Action Task Force noted that Uganda would remain on the grey list of countries that do not take full measures to combat money laundering and “terrorism” financing after the government failed to meet the May deadline, in which it had been expected to put in place measures to fight money laundering.
In details published in the Uganda Fourth Policy Review, IMF noted that whereas the government with the support of the Fund Technical Assistance, had started developing and implementing anti-money laundering risk-based supervision tools for banks, optimising supervision had remained a challenge due to resource constraints.
“Tools for foreign exchange bureaus and money remittance sectors have been rolled out but effective supervision requires optimising supervisory resources and coordination, which are currently a challenge due to resource constraints,” IMF said, noting that the Financial Action Task Force continues to maintain Uganda on the grey list after the country’s agreed action plan fully expired in May last year.
The IMF further said BoU should expedite measures to complete the remaining items under the country’s action plan as agreed to exit the grey list.
The measures will include formulation of policies and procedures to guide the implementation of supervisory sanctioning power as well as creating channels through which non-compliant financial institutions can be handled. The Financial Action Task Force, which has repeatedly pushed Uganda’s compliance deadline, in June granted the country a four-month extension to October to meet requirements under the action plan, failure of which the country would possibly be placed on the blacklist which features Myanmar, Iran, and North Korea. –The East African
Therefore, the IMF noted there was need for Uganda to continue implementing requirements under the action plan through which strategic deficiencies such as ensuring that competent authorities have timely access to accurate basic and beneficial ownership information for legal entities, could be addressed.
However, responding to the issues, Finance Minister Matia Kasaija and Bank of Uganda Director Research Adam Mugume, said risk-based tools for banks had been successfully rolled out in 2022 while similar tools for forex bureaus and money remitters had been rolled out in May this year.
“This will guide our [anti-money laundering] onsite inspections on banks, forex bureaus and money remitters on a risk-based approach,” Kasaija and Dr Mugume wrote in response to the concerns.
The East African
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