Number of Bill:
Bill No. 1 Anti-Money Laundering (Amendment) Bill 2016
THE ANTI-MONEY LAUNDERING (AMENDMENT) BILL, 2016.
ARRANGEMENT OF CLAUSES
Amendment of the Anti-Money Laundering Act, 2013
Replacement of section 6 of the principal Act
Insertion of new section 6A.
Replacement of section 7 of the principal Act.
Replacement of section 9 of the principal Act
Insertion of new section 9A
Replacement of section 10 of the principal Act
Amendment of section 13 of the principal Act
Amendment of section 14 of the principal Act.
Amendment of section 19 of the principal Act
Amendment of section 20 of the principal Act
Amendment of section 21 of the principal Act.
Insertion of new section 21A.
Amendment of section 38 of the principal Act
Replacement of section 116 of the principal Act
Insertion of new section 138A.
A Bill for an Act ENTITLED
THE ANTI-MONEY LAUNDERING (AMENDMENT) ACT,
An Act to amend the Anti-Money Laundering Act, 2013, to harmonise the definitions used in the Act; to provide for the carrying out of risk assessments by accountable persons; to provide for the identification of customers and clients of accountable persons; to provide for procedures relating to suspicious transactions; to harmonise the record keeping requirements and exchange of information obligations with international practice; to provide for the establishment of the Uganda Anti-Money Laundering Committee; and for related matters.
Be it enacted by Parliament as follows:
- Amendment of the Anti-Money Laundering Act, 2013.
The Anti-Money Laundering Act, 2013, in this Act referred to as the “principal Act” is amended in section 1—
- by inserting immediately after the definition of “Authority” the following—
““bearer negotiable instruments” means monetary instruments in the form of a document such as traveler’s checks and negotiable instruments, including checks, promissory notes and payment orders, that are issued to bearer, endorsed unconditionally or issued to a fictitious payee, or in another form that allows the transfer of the right upon delivery, and incomplete instruments including checks, promissory notes, and payment orders that are signed but have the payee’s name crossed out or omitted;”;
- by substituting for the definition of “beneficial owner” the following—
““beneficial owner” means the natural person who ultimately owns or controls a customer or the natural person on whose behalf a transaction is conducted, and includes a natural person who exercises ultimate effective control over a legal person or legal arrangement;”;
- by inserting immediately after the definition of “crime” the following—
““correspondent banking and other similar relationships” means the provision of banking or other similar services by one financial institution to another institution to enable the latter to provide services and products to its own customers;’’;
- by repealing the definition of “monetary instrument”;
- in the definition of “occasional transaction” by repealing the words “involving cash”;
- by substituting for the definition of “politically exposed person” the following—
“ “politically exposed person” means—
- an individual who is or has been entrusted with a prominent public function in Uganda or another country, and includes a head of state or head of government, senior politician, senior government official, judicial or military official, senior executive of a state owned corporation, and important party officials; and
- a person who is or has been entrusted with a prominent function by an international organization, and includes a member of senior management, director, deputy director or member of a board and includes a family member or close associate of the individual;’’;
- by substituting for the definition of “proceeds” the following—
““proceeds” means any property or economic advantage derived from or obtained, directly or indirectly, through the commission of a crime, and includes property later successively converted, transformed or intermingled, as well as income, capital or other economic gains derived from such property at any time after the commission of the crime;”;
- by substituting for the definition of “shell bank” the following—
““shell bank” means a bank incorporated in a jurisdiction in which it has no physical presence and which is not affiliated with a regulated financial group that is subject to effective consolidated supervision;’’
- by inserting immediately after “shell bank” the following—
““supervisory authority” means any body that regulates or supervises any of the persons and businesses listed in paragraph 14 of the Second Schedule, and who, for the purposes of this Act, shall supervise those persons and businesses in matters relating to anti-money laundering and countering the financing of terrorism;”;
(j) by inserting immediately after the definition of “tainted property” the following—
“ “terrorism financing” means the offence specified in the Anti-Terrorism Act, 2002;”.
The principal Act is amended by substituting for section 6 the following—
- An accountable person who maintains an account for a client or customer shall maintain the account in the true name of the account holder, and shall not open or keep anonymous accounts or accounts which are in fictitious or incorrect names.
- An accountable person shall carry out due diligence measures in the following circumstances—
- before or during the course of opening an account for or establishing a business relationship with a customer;
- before carrying out an occasional transaction equal to or above the amount of two thousand currency points or its equivalent in foreign currency; whether conducted as a single transaction or several transactions that appear to be linked;
- before carrying out an occasional transaction that is a domestic or international wire transfer;
- whenever there is a suspicion of money laundering or terrorism financing;
- understand the ownership and control structure of the customer;
- whenever doubts exist about the veracity or adequacy of previously obtained customer identification data;
- take any other measures as may be specified by the Minister by regulation.
- An accountable person shall apply the following due diligence measures on a risk sensitive basis and shall take into account the outcome of a risk assessment—
- identify and verify the identity of the client using reliable, independent source documents, data or information;
- identify and take reasonable measures to verify the identity of a beneficial owner;
- understand and, as appropriate, obtain information on the purpose and intended nature of the business relationship to permit the accountable person to fulfil its obligations under this Act;
- if another person is acting on behalf of the customer, identify and verify the identity of that other person, and verify that person’s authority to act on behalf of the customer;
- take any other measures as may be specified by the Minister upon the advice of the Board and the Authority.
- An accountable person shall, in addition to the measures specified in subsection (3), undertake further customer due diligence measures to—
- verify the identity of a customer using reliable, independent source documents, data or information, such as passports, birth certificates, driver’s licences, identity cards, voters cards, utility bills, bank statements, partnership contracts and incorporation papers or other identification documents prescribed by regulations made under this Act, in addition to documents providing convincing evidence of legal existence and powers of legal representatives;
- verify the identity of the beneficial owner of the account, in the case of legal persons and other arrangements, including taking reasonable measures to understand the ownership, control and structure of the customer obtaining information concerning provisions regulating the power to bind the legal person and verifying that any person purporting to act on behalf of the customer is authorised, and to identify those persons; and
- conduct ongoing due diligence on all business relationships and scrutinise transactions undertaken throughout the course of the business relationship to ensure that the transactions are consistent with the accountable person’s knowledge of the customer and the risk and business profile of the customer, and where necessary, the source of funds.
- An accountable person shall identify and verify the identity of the customer and beneficial owner before or during the course of establishing a business relationship or conducting an occasional transaction.
- An accountable person may complete the verification of the customer or beneficial owners’ identity after the establishment of the business relationship or carrying out of the occasional transaction provided that—
- the verification occurs as soon as reasonably practicable;
- the money laundering and terrorism financing risks are effectively managed; and
- delaying the verification is essential not to interrupt the normal conduct of business.
- In addition to customer due diligence measures, an accountable person shall implement appropriate risk management systems to determine whether a customer or beneficial owner is a politically exposed person and if so, apply the following additional measures—
- for a foreign politically exposed person, take reasonable measures to establish the source of wealth and funds;
- apply enhanced ongoing monitoring of the business relationship and obtain the approval of senior management before establishing or continuing a business relationship with such a person;
- for a domestic politically exposed person, and a person who is or has been entrusted with a prominent function by an international organization, apply the measures referred to in paragraph (a) where the risks of money laundering or terrorism financing are higher.
- In relation to cross-border correspondent banking and other similar relationships, an accountable person shall, in addition to customer due diligence measures, apply the following measures—
- adequately identify and verify the respondent institution with which it conducts such a business relationship;
- gather sufficient information about a respondent institution to understand fully the nature of the respondent’s business and to determine from publicly available information, the reputation of the institution and the quality of supervision, including whether it has been subject to a money laundering or terrorist financing investigation or regulatory action;
- assess the respondent institution’s anti-money laundering and terrorism financing controls;
- document the respective responsibilities of the accountable person and the respondent institution;
- obtain approval from senior management before establishing a new correspondent relationship;
- with respect to payable-through accounts, be satisfied that the respondent institution has verified the identity of and performed on-going due diligence on the customers having direct access to accounts of the correspondent and that the respondent bank is able to provide relevant customer identification data upon request to the correspondent bank.
- An accountable person shall apply the requirements under this section to cross-border correspondent banking and similar relationships established prior to the commencement of this Act.
- An accountable person shall not enter into, or continue, a correspondent banking relationship with a shell bank, or a respondent institution that is known to permit its accounts to be used by a shell bank.
- An accountable person shall implement specific and adequate measures to address the risks of money laundering and terrorism financing where the accountable person opens an account or establishes a business relationship or executes a transaction with a customer that is not physically present for the purpose of identification.
- An accountable person shall apply enhanced due diligence measures to business relationships and transactions with persons or financial institutions from or in countries identified by the Authority or the accountable person as high risk.
- An accountable person shall, as far as reasonably possible, examine the background and purpose of all complex, unusual large transactions and all unusual patterns of transactions which have no apparent economic or lawful purpose, document all information concerning those transactions and the identity of all parties involved in those transactions, and retain such records in accordance with this Act.
- Where the accountable person considers the risk of money laundering or terrorism financing is high, an accountable person shall apply enhanced customer due diligence measures, and shall increase the degree and nature of monitoring of the business relationship to determine whether those transactions or activities appear unusual or suspicious.
- An accountable person shall not, when unable to comply with the provisions of this section, open an account, commence a business relationship, or conduct the transaction, or shall terminate the business relationship, and make a suspicious transactions report in relation to the customer.
- An accountable person shall apply the provisions of this section to accounts and customers existing prior to the commencement of this Act and on the basis of materiality and
risk, and shall conduct due diligence on such existing relationship at appropriate times, or as prescribed by supervisory authorities.
- An accountable person shall develop and implement programs for the prevention of money laundering and terrorism financing that are appropriate to the risks and the size of the accountable person’s business and the programs shall include—
- internal policies, procedures, and controls to fulfil the obligations under this Act;
- appropriate compliance management arrangements;
- adequate screening procedures to ensure high standards when hiring employees;
- an employee training program to ensure that employees, managers and directors are kept informed of all the aspects of the anti-money laundering and combating terrorism financing requirements, new developments, money laundering and terrorism financing techniques, methods and trends, and concerning due diligence measures and suspicious transaction reporting;
- an independent audit function to test and verify compliance with and the effectiveness of the measures taken in accordance with the Act;
- mechanisms for sharing with other members of the financial group, information obtained under this section, and to protect the confidentiality and use of exchanged information.
- An accountable person shall apply the measures under this section to its branches and majority owned subsidiaries to the extent permissible by the laws of the host country where the subsidiary or branch is situated.
- Where the laws of the host country do not permit the proper implementation of the requirements under this Act, the accountable person shall implement additional measures, as appropriate, to manage the money laundering and terrorism financing risks and inform its supervisory authority.
- An accountable person may rely on a third party to perform elements of the due diligence process where the following conditions are satisfied—
- the accountable person immediately obtains all information required under this section;
- the accountable person is satisfied that copies of identification data and other relevant documentation relating to customer due diligence under this section shall be made available from the third party upon request and without delay; and
- the accountable person is satisfied that the third party is regulated, supervised or monitored for and has measures in place to comply with the requirements of this section.
- An accountable person who relies on a third party that is part of the same financial group as the accountable person may consider that the requirements are satisfied where—
- the group applies customer due diligence and recordkeeping requirements and applies internal controls and measures in accordance with the requirements of this Act;
- the implementation of the controls and measures referred to in paragraph (a) is supervised at a group level by a competent authority; and
- any higher country risk is adequately mitigated by the group’s anti money laundering and combatting the financing of terrorism policies.
- For the avoidance of doubt, the responsibility for customer identification and verification shall at all times remain with the accountable person relying on the third party.
- An accountable person shall ensure that simplified or reduced customer due diligence measures permitted for customers resident in another country are limited to countries that are compliant with or which have effectively implemented the internationally accepted standards.
- An accountable person shall ensure that documents, data or information collected under the customer due diligence process are kept up to date and relevant by undertaking regular reviews of existing documents.
- An accountable person shall ensure that it has or establishes policies and procedures to address specific risks associated with non face-to-face business relationships.
- An accountable person shall pay special attention to business relationships with persons from or in countries which do not apply or insufficiently apply or observe internationally recognized anti-money laundering and combatting of terrorism requirements.
- A competent authority shall establish guidelines to assist accountable persons to implement and comply with the anti-money laundering and combatting of terrorism requirements under this Act.
- A competent authority shall provide feedback to all accountable persons reporting under this Act.
- An accountable person shall take reasonable measures to ascertain the purpose of any transaction in excess of three thousand four hundred currency points, or of two thousand two hundred currency points in case of cash transactions and the origin and ultimate destination of the funds involved in the transaction.”
The principal Act is amended by inserting immediately after section
6, the following—
- An accountable person shall take appropriate steps to identify, assess and monitor its money laundering and terrorism financing risks.
- An accountable person shall identify, assess and, take appropriate measures to manage and mitigate the money laundering or terrorism financing risks that may arise in relation to—
- the development of new products and new business practices; including new delivery mechanisms for products and services; and
- the use of new or developing technologies for both new and pre-existing products.
- The risk assessment under subsection (2) shall take place prior to the launch of the new product or business practice, or the use of a new or developing technology.”
The principal Act is amended by, substituting for section 7 the
- An accountable person shall establish and maintain all necessary books and records relating to—
- the identity of a person obtained in accordance with customer due diligence measures;
- all transactions; both domestic and international, carried out by it and correspondence relating to the transactions as is necessary to enable the transaction to be readily reconstructed at any time by the Authority or other competent authority, and the records shall contain such particulars as the Minister may, by regulations prescribe;
- all reports made to the Authority under this Act; including any accompanying documentation;
- any enquiries relating to money laundering and financing of terrorism made by the Authority.
- For the purposes of subsection (1), books and records include—
- account files, business correspondence including the results of any analysis undertaken and copies of documents evidencing the identities of customers and beneficial owners obtained through customer due diligence measures or in accordance with the provisions in this Act;
- records on transactions and information obtained through customer due diligence measures, sufficient to reconstruct each individual transaction for both account holders and non-account holders including the amounts and types of currency involved, if any;
- any findings set out in writing in accordance with this Act and related transaction information.
- The books and records referred to in subsection (1) shall be kept for a minimum period of five years from the date—
- on which the evidence of the identity of a person was obtained;
- of any transaction or correspondence;
- on which the account is closed or business relationship ceases, whichever is the later.
- The books and records established and maintained for purposes of subsection (1) shall—
- be sufficient to enable the transaction to be readily reconstructed at any time by the Authority or competent authority to provide, if necessary, evidence for the prosecution of any offence; and
- be maintained in a manner and form that will enable the accountable institution to comply immediately with requests for information from the law enforcement agencies or the Financial Intelligence Authority;
- Where any book or record is required to be kept under this Act, a copy of the book or record, with the appropriate backup and recovery procedures, shall be kept in a manner prescribed by the Minister by regulations.
- The records maintained under this section shall be made available, upon request, to the Authority, or to a competent authority for purposes of ensuring compliance with this Act and for purposes of an investigation or prosecution of an offence.”
- Replacement of section 9 of the principal Act.
The principal Act is amended by substituting for section 9 the following—
“9. Reporting of suspicious transactions.
- An accountable person shall report to the Authority if it suspects or has reasonable grounds to suspect that a transaction or attempted transaction involves proceeds of crime or funds related or linked to or to be used for money laundering or terrorism financing, regardless of the value of the transaction.
- An accountable person shall make the report under section (1) without delay but not later than two working days from the date the suspicion was formed.
- The report under subregulation (1) shall be in the form prescribed by the Minister by regulations and shall be accompanied by any documents directly relevant to that suspicion and the grounds on which it is based.
- An accountable person, if requested by the Authority, shall give the Authority any relevant information or copies of documents or files, however and wherever stored, inside or outside their buildings, and within the time prescribed by the Authority.
- Advocates and other independent legal professionals and accountants are not required to report a transaction under this section if the relevant information was obtained in circumstances where they are subject to professional secrecy.
- An accountable person or its directors and employees shall not disclose to a customer or any other person the fact that a report under this section or related information will be, is being, or has been, submitted to the Authority or that a money laundering or terrorism financing investigation is being or has been carried out.
- Subsection (4), shall not preclude any disclosure or communication between and among directors and employees of the accountable person, in addition to advocates and competent authorities.
- Where a supervisory authority or an auditor of an accountable person suspects or has reasonable grounds to suspect that information in its possession concerning any transaction or attempted transaction may be—
- related to the commission of any offence under this Act or the offence of terrorism financing;
- relevant to an act preparatory to the offence of financing of terrorism;
- an indication of money laundering or the financing of terrorism, the supervisory authority or the auditor shall, as soon as practicable after forming that suspicion or receiving the information, but not later than two working days, report the transaction or attempted transaction to the Authority.”
- Insertion of new section 9A.
The principal Act is amended by inserting immediately after section
9 the following—
“9A. Protection of identity of persons and information in
suspicious transaction reports.
A person shall not disclose any information that will identify or is likely to identify—
- any person who has handled a transaction in respect of which a suspicious transaction report has been made;
- any person who has made a suspicious transaction report; or
- any information contained in a suspicious transaction report or information provided pursuant to this Act; except for the purposes of—
- the investigation or prosecution of a person for an unlawful activity, a money laundering offence or an offence of financing of terrorism; or
- the enforcement of this Act.”
The principal Act is amended by substituting for section 10 the following—
- A person—
- entering or leaving the territory of Uganda and carrying cash or bearer negotiable instruments exceeding one thousand five hundred currency points or the equivalent value in a foreign currency; or
- arranging for the transfer of cash or bearer negotiable instruments exceeding one thousand five hundred currency points or the equivalent value in a foreign currency into or out of the territory of Uganda by mail, shipping service or any other means,
shall declare that amount to the Uganda Revenue Authority in the manner prescribed by the Minister by regulations.
- The Uganda Revenue Authority may request additional information concerning the source and purpose of use of the cash or bearer negotiable instruments referred to in subsection (1).
- The customs department of the Uganda Revenue Authority shall, without delay, forward to the Authority any form completed under the requirements of this section.
- The Uganda Revenue Authority shall, in case of suspicion of money laundering or terrorism financing, or in the case of a false declaration or a failure to declare, seize the currency or bearer-negotiable financial instruments for a period not exceeding six months and shall immediately notify the Authority.
- The court may, on application by the Authority, extend the time beyond that prescribed in subsection (4) in respect of a seizure.
- The Authority shall, in consultation with the Uganda Revenue Authority, issue instructions and guidelines for the purposes of implementing the provisions of this section.”
Section 13 of the principal Act is amended by substituting for
subsection (1) the following-
“(1) An accountable person who engages in electronic funds transfers shall obtain and include accurate originator information and information relating to the recipient when carrying out electronic funds transfers and shall ensure that the information remains with the transfer order or related message throughout the payment chain.
(1)(a) A financial institution originating the wire transfer that is unable to obtain the information referred to in subsection (1) shall not execute the transfer.”
Section 14 of the principal Act, is amended—
- in subsection (1), by substituting for the word “no” occurring immediately after the words “confidentiality”, the word “any”;
- by inserting immediately after subsection (2), the following—
“(3) For the purposes of subsection (2), privileged
- confidential communication, whether oral or in writing, passing between an advocate in his or her professional capacity and another advocate in that capacity; or
- any communication made or brought into existence for the purpose of obtaining or giving legal advice or assistance; and
- any communication not made or brought into existence for the purpose of committing or furthering the commission of an illegal or wrongful act.’’
Section 19 of the principal Act is amended by substituting for
paragraph (e), the following—
“(e) exchange, spontaneously or upon request, any information with similar bodies of other countries that may be relevant for the processing or analyzing of information relating to money laundering or terrorism financing.”
Section 20 of the principal Act is amended in subsection (1)—
- in paragraph (a) by inserting the word “receive” immediately before the word “process”;
- by substituting for paragraph (b), the following—
“(b) shall disseminate, either spontaneously or upon request, information and the results of its analysis to any relevant competent authority in Uganda and if the analysis and assessment shows that a money laundering offence, a terrorism financing offence or a crime has been, or is being committed, to send a copy of the referral or information to the relevant supervisory authority;”
Section 21 of the principal Act is amended in subsection (1)—
- by inserting immediately after paragraph (p), the
“(pa) impose administrative sanctions on an accountable person who fails to comply with directives, guidelines or requests issued by the Authority;
(pb) register accountable persons;
(pc)keep a register of accountable persons;
(pd) coordinate a national risk assessment on anti-money laundering and financing of terrorism.”
The principal Act is amended by inserting immediately after section
21, the following new section—
- The enforcement of compliance with the provisions of this Act by an accountable person shall be the responsibility of the supervisory body of the accountable person.
- Where the accountable person has no supervisory body, it is the responsibility of the Authority to ensure that that accountable person complies with the provisions of this Act.
- The Authority or a supervisory body may direct any accountable person that has, without reasonable excuse, failed to comply in whole or in part with any obligations under this Act to comply.
- Where an accountable person fails to comply with a directive issued under subsection (3), the Authority or the supervisory body, may, upon application to a court, obtain an order against any or all of the officers or employees of that accountable person on such terms as the court deems necessary to enforce compliance with the Act.
- Subject to subsection (4) the court may order that should the accountable person or any officer or employee of the accountable person fail, without reasonable excuse, to comply with all or any of the provisions of the order, the accountable person or officer or employee shall pay a fine not exceeding one thousand eight hundred currency points, and may in addition pay an additional fine of one hundred and eighty currency point for each day that the failure to comply continues.
- A supervisory body, in exercising its powers under this section may—
- take any measures it considers necessary or expedient to meet its obligations as imposed by this Act or any other law, order, or directive made under this Act;
- require a reporting person supervised or regulated by it and to whom the provisions of this Act apply, to report on that accountable person’s compliance with this Act or any other law, order, or directive under this Act, in the form and manner determined by the supervisory body;
- issue or amend any licence, registration, approval or authorisation that the supervisory body may issue or grant in accordance with any other law, to include the following conditions—
- a requirement for compliance with this Act; or
- the continued availability of human, financial, technological and other resources to ensure compliance with this Act or any order or directive made under this Act.
- ascertain whether a person is fit and proper to hold office in a reporting institution taking into account any involvement, whether directly or indirectly by that person in any non-compliance with this Act, order, directive or Regulations made under this Act or in any money laundering activity.
- A supervisory body shall submit to the Authority, within such period and in such manner, as the Authority may in writing prescribe, a written report on any action taken against any reporting institution under this Act or any order, directive or regulations made under this Act.
- The Authority and every supervisory body shall coordinate the exercise of powers and performance of functions under this Act to ensure the consistent application of this Act.”
Section 38 of the principal Act is amended by repealing subsection 1(b).
The principal Act is amended by substituting for section 116 the following—
“116. Offence of money laundering.
A person who engages in any of act of money laundering prohibited in section 3, commits an offence.”
- Insertion of new section 138A.
The principal Act is amended by inserting immediately after section 138, the following new section—
“138A. The Uganda Anti-Money Laundering Committee.
- There is established a multi-disciplinary Committee to be known as the Uganda Anti- Money Laundering Committee.
- The Committee shall consist of—
- a representative of the Authority;
- a representative of the Bank of Uganda;
- a representative of the Ministry responsible for finance;
- a representative of the Ministry responsible for internal affairs;
- a representative of the Attorney General;
- a representative of the Inspector General of Police;
- a representative of the Director of Public Prosecutions;
- a representative of the Uganda Law Society;
- a representative of the Internal Security Organisation;
(j) a representative of the External Security Organisation;
(k) a representative of the Inspectorate of Government;
(l) a representative of the Uganda Revenue Authority;
(m) a representative of the Capital Markets Authority;
Bill No. 1 Anti-Money Laundering (Amendment) Bill 2016
(n) a representative of the Insurance Regulatory Authority;
(o) a representative of the Uganda Bankers Association;
(p) a representative of the Uganda Forex Bureau Association;
(q) a representative of the Uganda Registration Services Bureau;
(r) a representative of the Non-Governmental Organisations Board;
(s) a representative of the Institute of Certified Public Accountants of Uganda;
- The members of the Committee shall be appointed by the Minister.
- The members of the Committee shall be persons with knowledge, experience or expertise in matters relating to money laundering and combating financing of terrorism.
- The members of the Committee shall hold office for four years from the date of appointment and shall be eligible for re-appointment for one further term.
- The functions of the committee include—
- to act as the national task force in anti-money laundering matters;
- to develop an anti-money laundering and counter financing of terrorism national strategy;
- to advise the Minister in general on the performance of his or her functions under this Act and specifically on legislative and practical initiatives necessary to ensure compliance with international and regional standards in anti-money laundering and countering the financing of terrorism;
- to foster a sound and effective anti-money laundering regime;
- to foster and promote greater co-operation amongst various stakeholders, multi-disciplinary agencies within Uganda and Uganda’s regional and international partners in all anti-money laundering and combating of the financing of terrorism measures and endeavors;
- to ensure that Government policy on anti-money laundering and counter financing of terrorism is implemented;
- to publish quarterly reports on progress of the implementation of the national strategy plan;
- to publish an annual report on its activities and submit the report to the Minister; and
- to perform such other function as the Minister may assign in writing.
- Subject to any directions given by the Minister in writing, the Committee shall regulate its proceedings.”
Bill No. 1 Anti-Money Laundering (Amendment) Bill CROSS REFERENCES
Anti-Money Laundering Act, 2013, Act No. 12 of 2013 Anti-Terrorism Act, 2002, Act No. 14 of 2002 Financial Institutions Act, 2004, Act No. 2 of 2004
SUPPLEMENT No. 1 5th January, 2016.
to the Uganda Gazette No. 1 Volume CIX dated 5th January, 2016.
Printed by UPPC, Entebbe by Order of the Government.
Bill No. 1 Anti-Money Laundering (Amendment) Bill 2016
THE ANTI-MONEY LAUNDERING (AMENDMENT) BILL, 2016
The object of this Bill is to amend the Anti-Money Laundering Act, 2013, to harmonise the definitions used in the Act; to provide for the carrying out of risk assessments by accountable persons; to provide for the identification of customers and clients of accountable persons; to provide for procedures relating to suspicious transactions; to harmonise record keeping requirements and exchange of information obligations with international practice; to provide for the establishment of the Uganda Anti-Money Laundering Committee; and for related matters.
Defects in the existing law
From 14th to 23rd February, 2005 Uganda underwent an evaluation by the World Bank to assess her regulatory framework on anti-money laundering and combating the financing of terrorism. The World Bank report highlighted several weaknesses in Uganda’s anti-money laundering and combating financing of terrorism laws, systems and structures and made recommendations on the actions that Government should implement to address the weaknesses.
Among the key recommendations was the enactment of the AntiMoney Laundering Act and the amendment of the Anti- Terrorism Act, 2002 to comply with international standards.
The Anti-Money Laundering Act was enacted in 2013. However developments resulting from the revision of the Financial Action Task Force recommendations in 2012, were not incorporated in the
Anti-Money Laundering Act, 2013 which therefore rendered it non- compliant with the international standards on anti-money laundering.
The specific recommendations of the Financial Action Task Force that were not incorporated in the Act include—
- providing for risk assessment, which is the basis for risk- based approach to anti money laundering supervision;
- providing for foreign politically exposed persons, and differentiation between foreign and domestic foreign politically exposed persons, as well as including senior managers of international organizations as part of foreign politically exposed persons;
- prescribing the powers and responsibilities for the supervision of accountable persons by supervisory authorities;
- empowering the Financial Intelligence Authority to impose administrative sanctions on accountable persons who do not comply with the Act; and
- providing for a national coordination and domestic cooperation framework on anti-money laundering and combating the financing of terrorism.
In order to implement the recommendations of the Financial Action Task Force, the Bill seeks to amend the Anti-Money Laundering Act, 2013, to align the Act with the Financial Action Task Force standards.
The Bill seeks to amend section 1 of the Anti-Money Laundering Act, 2013 in respect of several definitions used in the Act in order to align them with the Financial Action Task Force definitions under the Financial Action Task Force standards, including definitions relating to politically exposed persons.
The Bill also seeks to replace section 6 and to insert a new section 6A in the Act to provide for the identification of clients, customers, other persons and other anti-money laundering measures, for purposes of clarifying the customer due diligence requirements in accordance with Financial Action Task Force standards and to deal with risk assessment considering new products and technologies in accordance with Financial Action Task Force recommendations.
Further the Bill seeks to replace section 7 of the Act relating to record keeping to align the Act with Financial Action Task Force recommendation 11 relating to record keeping and to replace section
- The Bill proposes to insert section 9A relating to reporting of suspicious transactions and protection of identity of persons and information in suspicious transaction reports respectively.
The Bill also seeks to replace section 10 of the Act relating to cross border movements of currency and negotiable bearer instruments.
The Bill proposes to amend section 13(1) of the Act to require an accountable person who engages in electronic funds transfers to obtain accurate originator information and information relating to the recipient of the funds.
The Bill seeks to insert section 21A to empower the Authority to enforce compliance with this Act. For instance, section 21A proposes to empower the Authority to issue a written warning to any person who contravenes any provision of the Act.
Lastly, the Bill seeks to insert a new section 138A to establish the Uganda Anti-Money Laundering Committee as a national multidisciplinary committee to comprise twenty (20) members appointed by the Minister; being senior representatives of relevant disciplines from the legal, judicial, financial and law enforcement sectors of Uganda and being persons with knowledge, experience or expertise in matters relating to money laundering and combating of financing of terrorism and related matters.
MATIA KASAIJA (MP), Minister of Finance, Planning & Economic Development.