Resources, upgrades crucial in financial crime fight

Uganda's legal tender. PHOTO/COURTESY

What you need to know:

  • The issue: Financial crime. 
  • Our view: We should be cognizant of the need to frequently audit FIA’s operations to ensure that its manpower is technologically savvy and  financially literate.

Earlier this month, the digital payments platform, WorldRemit, announced the closure of its send licence in Uganda, meaning that money cannot be sent from Uganda.

The platform did not give a detailed explanation for its decision. It only stated that its goal is to ensure that it continues to offer the greatest value for its customers, adding that as a result, it occasionally has to make “difficult decisions that impact a small number of customers”.

WorldRemit’s decision was, however, announced in a month in which the executive director of the Financial Intelligence Authority (FIA), Mr Sydney Asubo, said sanctions by the Financial Action Taskforce (FATF) would come into force due to Uganda’s failure to fulfil commitments that it made in 2020 to tackle money laundering.

The sanctions have serious ramifications for an economy that is already suffering from the effects of disruptions in the global supply chain that have been occasioned by the Covid-19 pandemic and the war in Ukraine, both of which have triggered, among others, steep fuel prices, higher transport costs and shortages of wheat flour. 

These developments come several years after the former Inspector General of Government (IGG), Justice Irene Mulyagonja, pointed out that corruption has become more sophisticated because of advances in technology.

That was a call to government to avail anti-corruption agencies with more resources; upgrade the skills of the foot soldiers; and tweak their approaches and tactics in the fight against corruption.

Now whereas FIA has deployed the Anti Money Laundering System (goAML) software in commercial banks, credit taking institutions and microfinance deposit taking institutions, that deployment stands at only 75 percent, meaning that the other 25 percent of institutions remain possible conduits. This points to lack of resources to cover the entire financial sector.

The biggest question though is how well equipped FIA is to deal with financial crimes at a time when technology is an enabler of crime.

Mr Asubo told Parliament in January that whereas the approved structure provides for 83 members of staff at the head office, there are only 43 members of staff because of underfunding on the part of government. The FIA boss also said funds to enhance its Information Communication Technology (ICT) systems, were never enough to match the task.

These issues must be addressed at the soonest. And as we address them, we should be cognizant of the need to frequently audit FIA’s operations to ensure that its manpower is technologically savvy, financially literate and skilled enough to be able to detect and stop financial crimes.

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