Thursday March 27 2014

Investigate politicians, financial firms told



Financial institutions should investigate politicians before establishing a business relationship with them.
This, Mr Titus Mulindwa, the Bank of Uganda deputy director legal department, said will curb money laundering.

Quoting Section 6 of the Anti-Money Laundering Act, Mr Mulindwa said politically exposed persons are high risk customers who should be subjected to extra checks, through the ‘Know Your Customer’ procedures.

A politically exposed person is one who is a current or former senior official in the executive, legislative, administrative, military, or judicial branch of a government or a senior executive of a government owned commercial enterprise, be it a corporation or business.

“People who have access to national coffers should be subjected to stricter checks to ensure that they don’t misuse public resources to pursue personal interests,” Mr Mulindwa said at the ACCA Continuous Professional Development Seminar in Kampala on Wednesday.

Politically exposed persons have been reported to swindle public funds which are then cleaned through the formal financial system.

The Anti-Money Laundering Act was assented to by President Museveni in October last year, enabling Uganda to crackdown on the vice of cleaning illegitimately earned cash – gained from corruption and drug trafficking activities among others – through the formal financial system.

The Act states that a financial institution must obtain approval of senior management before establishing a business relationship with a politically exposed person.

punishment for Money Laundering
The Act criminalises money laundering and persons involved in laundering are liable to imprisonment for a period not exceeding 15 years or a fine not exceeding Shs2 billion or both.