Uganda is on the brink of being removed from the Financial Action Task Force’s (FATF) grey list after the global financial industry monitoring agency commended the country for implementing measures to enhance its regulatory framework against anti-money laundering and terrorist financing (AML&TF) activities.
Despite the positive feedback, experts warn of new challenges that could jeopardize Uganda’s standing in the global financial system. The FATF has acknowledged Uganda’s efforts but will make a final determination after an onsite visit scheduled for early next year.
The grey list represents a crucial stage preceding a potential blacklisting, which would isolate Uganda from the global financial industry. Even in the grey list, some entities have imposed restrictions on transactions with Uganda, heightening scrutiny of financial activities involving the country.
Minister of State for Finance, Planning, and Economic Development, Henry Musasizi, emphasized the government’s political commitment to supporting the implementation of Uganda’s Anti Money Laundering and Countering of Terrorism Financing Framework. The Financial Intelligence Authority (FIA) expressed confidence in a positive assessment outcome.
The FATF Plenary’s recent approval of an onsite visit aims to verify the sustained implementation of previously recommended reforms. FIA Executive Director Samuel Were Wandera highlighted that the visit would confirm high-level political commitment.
In preparation for the visit, a Technical Assistance Workshop in Kampala organized by the East and Southern African Anti-money Laundering Group addressed the FATF’s International Cooperation Review Group. The workshop focused on ensuring Uganda’s adherence to regulatory reforms.
Uganda has undertaken various policy and operational measures, including adopting a National Anti Money Laundering and Combating Financing of Terrorism (AML/CFT) Strategy, implementing risk-based supervision for financial institutions, and enforcing Beneficial Ownership Declaration obligations.
Despite the positive momentum, concerns have been raised regarding emerging challenges. Financial consulting firm PwC commended Uganda for addressing legal and regulatory deficiencies but warned of new threats, including Ponzi schemes. The firm noted that such schemes, often operating with limited Know Your Customer (KYC) procedures, pose money laundering risks due to their reliance on cash or crypto operations.
PwC urged the government to establish regulations guiding the operations of multi-level marketing companies to prevent their exploitation for money laundering, emphasizing the importance of this action as Uganda aims to exit the FATF grey list.
As Uganda awaits the FATF’s assessment tour, the country balances the optimism of removal from the grey list with the need to address evolving challenges in the fight against financial crimes.
