The Ministry of Finance Permanent Secretary, Ramathan Ggoobi, who is also the Secretary to the Treasury has allayed fears of investors from the European Union about Uganda dealing with money laundering and terrorism financing.
“I want to assure you(investors) that Uganda is as clean as a shirt. We have strengthened our financial institutions in terms of how they run their business to ensure they flush out fraud . We have done a pool of things to ensure we get to the level where the gatekeeper(Financial Action Task Force (FATF) said we are good to go,” Ggoobi said.
The Secretary to the Treasury was speaking during the Uganda-European Union business forum at Speke Hotel Munyonyo on Thursday.
The Financial Action Task Force last month announced Uganda had finally been removed from the list of countries that are weak in laws on anti-money laundering .
The grey list shows the performance of countries regarding the safety or level of risk of their financial systems.
The consequence of Uganda’s being blacklisted was those transactions originating from Uganda or made through Uganda’s financial system and cash from or to the country, face more scrutiny by the international systems, which leads to delays in concluding business transactions.
Additionally, when a country is blacklisted, countries or other financial jurisdictions may block some transactions if they cannot ascertain the source or destination of the money or prove that it has nothing to do with money laundering.
Speaking on Thursday, PS Ggoobi said Uganda has put in place several measures including institutional and policy frameworks to ensure the country flushes out dirty money
He explained that it started with the beneficial ownership aspect.
“We started with the declaration of the beneficial owner’s interest whether financial or equity. We have worked with Uganda Registrations Services Bureau(URSB) to strengthen the institutionalization of this aspect. To this effect, a number of companies were a few months ago crying that URSB had deregistered them but they had not filed returns as the law requires them to declare on the various aspects including ownership like directors, their line of business and so many other details,” Ggoobi said.
There was a mad dash in December last year for companies to update their details with the Uganda Registration Services Bureau(URSB) after banks froze their accounts for failure to meet the deadline for update their details to indicate their beneficial ownership.
A beneficial owner is a natural person who has the final ownership or control of a company or partnership.
In this case, such a person is one who is not a registered director of an entity.
It can also mean a natural person on whose behalf a transaction is conducted in the company or partnership, including a person who exercises ultimate control over that entity.
It has always been common practice for a person to register a company, not in their names, nor do they usually appear anywhere in the operations or supervision of the company and the requirement is meant to check on this.
Therefore, the regulations that require for beneficial ownership were developed and implemented to partly to deal with money laundering and illicit finances as a response to calls on Uganda by the international anti-money laundering platform, the Financial Action Task Force (FATF), to improve her safeguards against money laundering, illicit financing, and terrorism funding.
Speaking on Thursday, the Ministry of Finance Permanent Secretary said the Financial Intelligence Authority has also continued to strengthen institutions and the various tools for flushing out movement of money from illicit sources.
“We have put up a unit at Bank of Uganda , we have strengthened the Financial Intelligence Authority to carry out its mandate and have also strengthened institutions like Uganda Police that are tasked with the responsibility of fighting situations like terrorism money and proliferation of small arms and other illicit flows.”
