Ugandan parliament has finally passed an Anti-Money Laundering Bill, joining other countries in the region in the crackdown on corruption, drug trafficking and terrorism financing.

Kenya, Rwanda and Tanzania have stringent anti-money laundering laws, which have established state agencies to eradicate the vice.

The Bill, now awaits presidential assent to become law and will not be retrospective as some MPs had demanded.

While a section of Members of Parliament wanted the Bill passed into law and backdated, others said the law would facilitate witch-hunt.

Proponents of the Bill said a retrospective law would pave the way for enforcement agencies to bring to book all suspects who committed the crime in the past.

“We want this law to have a retrospective effect going as far back as 2001. We also want a threshold on how much can be withdrawn from a financial institution. We have made a retrospective law before,” said Arua County MP Odonga Otto during the second reading of the Bill.

There were suspicions that some senior government officials and their allies deliberately delayed the enactment of the law, afraid that it would be used against them.

Read: Uganda doesn't need dirty money to grow, so let's clean up the new law and pass it

The Bill was first presented before the seventh parliament in 2004 but government quickly withdrew it from the House to fix apparent loopholes.

In 2009, the Bill was tabled again but it was shelved and was never reintroduced before the term of the eighth parliament expired. However, in March this year, the Bill was tabled for a third time.

Also Read: Parliament, Cabinet in blame game over Bills

If the Bill is assented to, investigating agencies will be allowed to dig into the sources of government officials’ wealth. Investigators will also probe transactions on government officials’ banks accounts, to find out how corruption proceeds are wired into and out of the country.

The Anti-Money Laundering Bill criminalises money laundering and provides for the establishment of a Financial Intelligence Authority that would have unlimited access to any suspicious accounts for purposes of carrying out investigations into the source, destination and recipients of the money.

Obligations of banks/client confidentiality will not be an impediment to the investigations.

In addition, the Bill makes it mandatory for financial institutions to keep records of their clients’ transactions for at least 10 years after the conclusion of such deals.

However, there have been cases where people open banks accounts without giving bank details that can be used to trace them incase of an investigation. The Bill makes it compulsory for financial institutions to exercise due diligence depending on the type of client when opening accounts.

For instance, for senior government officials who have access to public funds, the Bill calls for enhanced due diligence. This includes constant monitoring of all transactions and establishing sources of funds deposited into such accounts.

Above all, such clients must present to the bank a board of directors’ approval authorising them to open a bank account. The bank is mandated to seek information about the client and verify all the information provided.

Banks are central actors because they are used to stash proceeds from corruption, drug trafficking and illicit trade. The ill-gotten profits are then concealed in real estate investments, unofficial money lending and other legitimate activities.