A weak anti-money laundering regime could see Uganda blacklisted in the international financial system, thereby affect correspondent banking arrangements among lenders and raising costs of foreign borrowing incurred by local firms.

Whereas the passing of the Anti Money Laundering Act in 2013 helped appease the international community, slow progress evidenced in building enforcement capacity has raised fresh concerns, The EastAfrican has learnt.

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The country has not met the deadline for appointment of board members to supervise the Financial Intelligence Authority (FIA), it is yet to amend the Anti Terrorism Act of 2002 and it lacks a software monitoring system for financial transactions — even though it had committed itself to complying with these obligations by January.

Equally, the government has issued no fresh implementation timelines, less than three months to the next review session of the Financial Action TaskForce, government sources revealed.

It is reported that President Yoweri Museveni rejected some of the names submitted for the FIA board while efforts to amend the Anti-Terrorism Act of 2002 have been frustrated by lack of numbers in parliament.

Low funding to the FIA has similarly frustrated efforts to bridge compliance gaps. While the institution commenced operations in September 2014, initial budget allocations amounted to only Ush1.7 billion ($564,400) — a relatively small resource envelope depleted by rental bills, staff welfare expenses and transport costs, insiders claim.

Faced with limited resources, plans for purchase of a sophisticated financial monitoring software platform valued at $200,000 remain on hold amid uncertainty over planned allocations outlined in the recent supplementary budget request estimated at Ush862 billion($286 million).

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