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Insight Post Uganda
Home Editorial

Anti-Money Laundering Act Amendment to Remove NGOs from List of Accountable Persons

Insight Post Uganda by Insight Post Uganda
August 6, 2024
in Editorial
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Anti-Money Laundering Act Amendment to Remove NGOs from List of Accountable Persons

The Ugandan government has unveiled plans to amend the Anti-Money Laundering Act, specifically targeting the removal of non-governmental organizations (NGOs) from the list of accountable persons. 

Moses Ogwapus, the Commissioner in charge of Financial Services at the Ministry of Finance, has confirmed the development, saying that the proposed amendment aims to alleviate the regulatory burden on NGOs, a move expected to streamline their operations and enhance their ability to focus on their core missions. 

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“We are now nearing the final stages of amending the law to remove NGOs from the list of accountable persons,” Ogwapus announced, earning applause from members of the NGO community. 

Ogwapus, who also serves as the Vice Chairperson Uganda Anti-Money Laundering, Countering Financing of Terrorism, and Countering Proliferation Financing, made the remarks on Monday afternoon during the ongoing Sub-Saharan Conference in Uganda.

The conference is focused on exploring how civil society organizations and states can collaborate on countering terrorism financing. 

The Anti-Money Laundering Act of 2013 (as amended) designates NGOs, churches, and other charitable organizations as accountable persons.

This classification subjects them to the full spectrum of Anti-Money Laundering and Countering the Financing of Terrorism. requirements, including customer due diligence and the reporting of suspicious transactions. 

Yona Wanjala, the Executive Director of Defenders Protection Initiative, acknowledges that while Nonprofit Organizations, especially NGOs, could potentially be misused for money laundering and terrorism financing, designating them as accountable persons is both unlawful and not mandated by the Financial Action Task Force (FATF) recommendations.

Wanjala noted that their persistent efforts to amend the law and remove this provision are finally being acknowledged by the government, and they are encouraged by the progress. He believes there are more effective approaches to ensuring NGO compliance.

Robert Kirenga, the Executive Director of the National Coalition of Human Rights Defenders Uganda, emphasized that designating NGOs as accountable persons has been misused to target and obstruct the activities of civil society groups and activists.  

He noted that similar measures in other countries have been employed to weaponize counter-terrorism laws, severely restricting the non-profit sector and limiting access to essential funding. 

“Such provisions have led to the freezing of NGO accounts, arrests of leaders, and raids on offices. Amending this law will allow NGOs to operate without these threats and hindrances,” Kirenga added.  

Over the years, the NGO sector has raised concerns about certain provisions of the Anti-Money Laundering and Countering the Financing of Terrorism. In May 2021, NGOs recommended removing Category 15 from the 2nd Schedule of the Anti-Money Laundering Act, which lists accountable/reporting entities. 

In accordance with international best practices recommended by the Financial Action Task Force (FATF), NGOs proposed that measures to prevent terrorism financing (TF) abuse within the non-profit sector should be specifically targeted. They suggested that only those Not for profit organizations that fit the FATF definition, based on a detailed risk assessment, should be subject to scrutiny.    

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