How Uganda removed its name from FATF grey list

Uganda has been on the list of anti-money laundering and terrorism financing agencies after the country failed to enforce regulations in the Non-Governmental Organisations (NGOs) sector. PHOTO/FILE

What you need to know:

  • The grey list is a roster of jurisdictions subject to increased monitoring by the FATF due to concerns regarding deficiencies in Anti-Money Laundering and counterterrorism financing measures.

Uganda on February 23 finally exited the Financial Action Task Force (FATF) grey list, marking an end to a protracted fight that had threatened the country with blacklisting. 

Officials from the Financial Intelligence Authority (FIA) on Friday said the removal from the grey list marks a significant milestone in the country’s dedication to enhancing financial transparency and combating money laundering and terrorist financing.

The FATF, an intergovernmental organisation, that sets global standards for combating illicit finance, placed Uganda on its grey list in February 2020 due to concerns regarding deficiencies in Anti-Money Laundering and counterterrorism financing (AML/CFT) measures.

FIA officials told Monitor that since being placed on the grey list Uganda has implemented a series of rigorous reforms. It has also demonstrated substantial progress in aligning its financial regulations with international standards.

“Uganda’s exit from the FATF grey list is a testament to our unwavering commitment to fostering a transparent and secure financial environment. It reflects the concerted efforts of our government and regulatory authorities to strengthen our AML/CFT framework and facilitates greater access to international financial markets,” Mr Samuel Were Wandera, FIA’s executive director, said, adding that the development opens opportunities for investments in the country.

Tireless efforts
According to FATF, the grey list is a list of jurisdictions under increased monitoring and are countries that have made a commitment to address strategic deficiencies regarding money laundering, terrorist financing, and proliferation financing in an agreed period and are subject to increased monitoring. 

Uganda was placed on the grey list in February of 2020. Being taken off it, said Mr Wandera, was down to high-level political commitment to work with FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).

He said Uganda committed to consolidating the highlighted achievements attained during the period and to further strengthen the AML/CFT/CPF regime.

“We shall achieve this through increased engagements with the private sector to aggressively embrace the various AML/CFT/CPF measures, including dealing with the identified risks, as well as strengthening the capacity of the institutions involved in the fight against ML/TF crimes,” he said.

Sydney Asubo, the immediate past FIA executive director, told this publication on Friday that the removal was long overdue.

“This is the culmination of four years of hard work […] I know that more hard work still lies ahead in the months and years to come, but for today we celebrate this great news,” he said.

Basking in glory
Uganda has been on the list of anti-money laundering and terrorism financing agencies after the country failed to enforce regulations in the non-governmental organisations (NGOs) sector. The slow progress on the prosecution of money laundering and corruption cases in the courts of law didn’t help matters.

For the last three years, Uganda unsuccessfully attempted to exit the grey list and almost tipped over to the blacklist. However,  government embarked on a grand reform to address concerns raised by the FATF. 

Officials in Kampala said Uganda’s successful exit from the FATF grey list not only reinforces the country’s reputation as a responsible member of the global financial community but also enhances its attractiveness to investors and facilitates greater access to international financial markets.

“The Financial Intelligence Authority expresses gratitude to the FATF for its constructive engagement and guidance throughout this process. Uganda remains committed to sustaining momentum in its efforts to strengthen its AML/CFT framework further and contribute to global efforts to combat financial crime,” a statement signed by Mr Lazarus Mukasa, the deputy executive director of FIA, Uganda said.

He said the decision to delist Uganda from the grey list was disclosed by the FATF President, Mr T Raja Kumar, while announcing the outcomes of the fifth plenary meeting which took place in Paris, France from February 21 to 23.

Mr Mukasa said during the period when Uganda was under close monitoring by FATF, the government initiated key AML/CFT reforms intended to improve the robustness of Uganda’s systems to deal with Money Laundering (ML) and Terrorism Financing (TF). 

Decisive reforms
The said reforms, he noted in the statement, include: “Adopting a national AML/CFT,CPF (Countering of Proliferation Financing) Strategy; Enhancing the use of mutual/legal assistance and maintaining comprehensive statistics; developing and implementing a risk-based supervision of the financial and designated non-financial business and professionals (DNFBP) sectors and ensuring that law enforcement agencies and judicial authorities apply the ML offence consistent with the identified risks as well as establishing procedures to trace and seize proceeds of crime.”

According to FIA statement, other reforms undertaken by Uganda are: “Enhancing the ability of the law enforcement agencies to conduct terrorism financing investigations and prosecutions; implementing proliferation financing-related targeted financial sanctions; strengthening the capacity of relevant AML/CFT Ministries Departments and Agencies (MDAs) to implement the said reforms effectively and sustainably the future.”

It now remains to be seen whether the country will maintain its reforms and for how long it will remain off the grey list.

Black and grey lists
The Financial Action Task Force (FATF) runs both grey and black lists of countries that it monitors closely. Countries that remain on the grey list include: Barbados, Bulgaria, Burkina Faso, Cameroon, Croatia, the Democratic Republic of the Congo, Gibraltar, Haiti, Jamaica, Mali, Mozambique, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Türkiye, United Arab Emirates, Vietnam, and Yemen.

Three countries, including the Democratic People’s Republic of Korea, Iran, and Myanmar are still on the blacklist.

The blacklist is a list of countries that are thought to pose a high risk of money laundering, terrorist financing, and proliferation financing, due to their significant strategic deficiencies in that regard. 

FATF calls on its members and other jurisdictions to apply enhanced due diligence and, in the most serious cases, to apply countermeasures to these countries.