The Financial Intelligence Authority has warned banks that they are among those highly targeted by money launderers.
Speaking during the launch of the 3 tier course for bankers on money laundering and anti-terrorism financing organised by the Uganda Institute Of Banking and Financial Services(UIBFS), Fiona Nabaggala , the acting Director in charge of compliance at FIA said banks are targeted by money launderers to provide entry point for laundered money into the financial system.
“Banks have been identified as the prime focus of money laundering and provide an entry point for laundered money into the financial system. Research indicates that the risk in the banking sector is high,” Nabaggala said.
She noted that matters have been made worse with technological advancement which has made it easy for money launderers to do their business easily.
“The recent advances in technology and globalization have offered and will continue to offer more sophisticated means to convert ill-gotten proceeds to legally acceptable finance assets like the use of crypto currencies.”
“As banks, the biggest challenge is to recognise that technology and globalization have given launderers an opportunity to explore new techniques to commit and cover their crime which therefore requires becoming more vigilant and dynamic.”
Financial crimes grey list
Uganda was placed on the grey list in 2020, a list that highlights countries that have significant shortfalls in tackling money laundering.
The grey list shows the performance of countries regarding the safety or level of risk of their financial systems
Speaking during the same function, the head of asset recovery at the Inspectorate of Government, Kajura Simon Ogwal said be place on the grey list has dire consequences.
“Many of you have heard of instances where Ugandans are complaining of having gone to forex bureaus lets say in the Netherlands and tried to exchange €500 and they refused to exchange them and said only €200 can be exchanged because your passport is Ugandan. We have so many people who will be willing to come and start business here but because of the grey list, they will be careful of investing in businesses regulated by government,” Kajura said.
He explained this is so because the national risk assessment believes that corruption brings the most proceeds and that ordinarily corrupt is done by government.
“If you are on the grey list, you are dealt with by other countries with caution. This means the country will lose foreign direct investments as many don’t want to invest since the international community has said it is a risky do so. If you are receiving payments from a jurisdiction where bankers know the country the money is going is on the grey list, they will have to do due diligence using their accountants and lawyers to ensure the transaction is safe. That creates a scenario where the money you are to receive has to be chopped to cater for fees for lawyers and accountants to ensure the money is clean.”
Course for bankers
According to Goretti Masadde, the chief executive officer of the Uganda Institute of Banking and Financial Services, the 3-tier anti money laundering and counter terrorism financing course will help train bankers in detecting and dealing with money laundering.
“Our industry plays a critical role in the development of our country and the public we serve. However, it also bears the risk of being a conduit for the activities of wrong people that continually undo or undermine the safety and development efforts of our country and globe through money laundering and terrorism Financing. This course will therefore equip bankers with knowledge and techniques to detect laundered money,” Masadde said.
“We are mandated to professionalise the industry and it is incumbent upon us to ensure everyone has knowledge about money laundering. The course is going to address the gaps within board of directors and top management, compliance and risk teams responsible for ensuring the vices don’t occur but also the general staff who deal with money launderers and terrorism financers.”
She said whereas there were already courses, they were targeting individuals but noted the latest one is to ensure everyone is brought on board.
Michael Mugabi, the chairman of the board of the Uganda Institute of Banking and Financial Services said these efforts are aimed at complementing efforts to get Uganda off the grey list.
“The banking industry plays an important role in the economy but also wrong elements target banks and other entities to achieve their wrong motives. We are therefore coming together to ensure we equip our staff with knowledge. We will run this training program to ensure we are strong as a sector and country at large in as far as dealing with money laundering and terrorism financing,”Mugabi said.