In its simplest forms, money laundering is the concealment, disguise, conversion, transfer or removal of criminal property.

The common denominator is dirty money which, true to the “proceeds of crime” descriptor, has its roots in corruption, bribery, theft, drug trafficking, tax evasion or even fraud. a chaotic mix of all that.

Money launderers are dedicated to washing away – both literally and metaphorically – dirty money. Their goal, vastly ambitious in scope and reach, is to make the money appear to be coming from a clean source.

The offense carries a maximum prison sentence of 15 years in Uganda. The main legislation governing money laundering is the Anti-Money Laundering Act 2013. In addition to this penalty of “imprisonment for a period not exceeding 15 years” provided for complex schemes, there is also the possibility of “a fine not exceeding one hundred thousand exchange points or both.

The methods employed in money laundering involve great sophistication and complexity. This makes it a cold business no matter who runs it. Injecting illegally obtained money into the legitimate financial system while disguising its origins takes on a convoluted nature.

Ever since universal banking made money traceable, money launderers gravitate toward businesses whose tax authorities can’t quite understand the number of customers and the quantity and value of what was sold.

Businesses like casinos (as seen in the TV series Ozark), nail salons (in Breaking Bad), bakeries, restaurants, and nightclubs have proven particularly popular.

The proceeds of crime are then conflated with the actual earnings of a given business.

In the recent past, the amount of money that money launderers hold in offshore accounts has increased exponentially. Shell companies and unregistered trusts in tax havens have allowed money laundering activities to flourish overseas. The television series McMafia told the gripping tale of these modern-day gangsters.

The real world often mirrors the real world, and in this case at some cost. A 2022 report (Corporate Transparency: A Guide for Beneficial Ownership Laws in Uganda) co-authored by Global Financial Integrity (GFI) and Advocates Coalition for Development and Environment (Acode) estimates that Uganda loses 2 trillion shillings annually ($550 million) in illicit financial income. streams such as “corruption, money laundering, organized crime, trade misinvoicing and tax evasion”.

The report grimly adds that this “translates into missed development opportunities, lost livelihoods and increased poverty” for Ugandan citizens.

Elsewhere, the Anti-Money Laundering Act 2013 continues to arouse similar fears and fascination. In 2013, the government was forced to prepare for anti-money laundering legislation. This happened after the Financial Action Task Force (FATF) discovered the failure of the government’s key anti-corruption pillars.

The FATF has made clear that unmonitored and often unenforceable anti-corruption laws risk making Uganda an international pariah.

Fears that by allocating more urgency and resources to defeating money launderers, government critics could be caught in the crosshairs crystallized in December 2020.

With anti-money laundering legislation in place, government law enforcement agencies have moved to freeze the bank accounts of a range of non-governmental organizations (NGOs).

While the government has insisted there are reasonable grounds to suspect that the money in the accounts of said NGOs was either illicitly obtained or intended for illegal use, affected parties have called the allegations fake ones. Observers say this is alarming testimony to how the bill can be used to stigmatize civic groups.

High Court Judge Musa Ssekaana recently described as “irregular” the government’s indefinite suspension of one of the 54 NGOs.

In a terse statement, Chapter Four said it was “look[ing] before committing[e] the National Bureau of Non-Governmental Organizations after Judge Ssekaana instructed the Home Office appendix to “approach the decision-making process with an open mind.”

Control money laundering

The Anti-Money Laundering (AML) law was passed in 2013, and the intelligence unit was asked to apply it a year later. The first conviction for money laundering in Uganda dates back to 2015 in the case Uganda against Serwamba David Musoke and 6 others. Prior to the coming into force of the AML Act in 2013, the offense of money laundering was not criminalized under Ugandan law. The AML Act pronounces on money laundering as follows:

Who is a money launderer?

lA person who converts, transfers, transports and transmits property knowingly or having reason to believe that such property is the proceeds of a crime, for the purpose of concealing or disguising the illicit origin of the property or assist any other person involved in the commission of a crime generating the proceeds to escape the legal consequences of their actions;

l A person who conceals, disguises or impedes the establishment of the true nature, source, location, disposition, movement or ownership of or rights to any property knowing or having reason to believe that such property is the proceeds of a crime, commits an offence;

A person who acquires, possesses, uses or administers property knowing or having reason to believe at the time of receipt that the property is the proceeds of crime commits an offence;

A person who acts to evade the transaction reporting requirements set out in Part III of this Act commits an offence;

A person who assists another person to benefit from known proceeds of crime commits an offence;

A person who uses known proceeds of crime to facilitate the commission of a crime commits an offence;

A person who participates in, associates with, conspires to commit, attempts to commit, aids and mitigates or facilitates and counsels the commission of any of the acts described in sections (a) through (f) above commits an offense .

Transactions carried out in the name of a person whose identity has not been established to the satisfaction of the officer or employee carrying out the transaction;

Business relationships and transactions with persons in jurisdictions that do not have adequate systems in place to prevent or deter money laundering or terrorist financing;

Electronic funds transfers, other than electronic funds transfers referred to in subsections 13(2) and (3) that do not contain complete originator information.

A natural person who commits an offense is liable, on conviction, to imprisonment for a term not exceeding 15 years or to a fine not exceeding one hundred thousand points of exchange or both;

A legal person who commits an offense is liable, on conviction, to a fine not exceeding two hundred thousand points of exchange;

An offense mentioned in Articles 115 to 133 is punished, if committed by a natural person, with imprisonment not exceeding 5 years or a fine not exceeding thirty three thousand exchange points, or both penalties. at a time ;

An offense mentioned in Articles 115 to 133 is punished, if committed by a legal person such as a legal person, with a fine not exceeding seventy thousand currency points;

An offense mentioned in articles 115 to 133 is punished, if it is continuous, by a fine not exceeding five thousand currency points for each day on which the offense continues;

An offense mentioned in Articles 115 to 133 is punished, if no specific penalty is provided, by a fine of up to nine thousand currency points and, in the event of a repeat offence, by an additional fine of five thousand currency points. at most for each day that the infringement continues.

Source: Anti-Money Laundering Act 2013