The AML law And you- an interview with the ED, FIA

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Taken together, the AML act addresses underground and illicit trade activities that un­dermine economic growth through unfair resource distribution. In line with one of the authority’s mandate of creating public awareness, Sum­mit Business talked with the Au­thority’s pioneer ED, Sydney Asubo, about the future of the authority. Below are the excerpts.Please tell us about yourself?

My name is Sydney Asubo. I am the pioneer Executive Director of the Financial Intelligence Authority (FIA), Uganda, a position I have held since 1st July, 2015. I am an Ad­vocate by training and prior to my engagement at the FIA, I was chief prosecutor (Director of Legal Affairs) at the Inspectorate of Government and before that a Senior State At­torney at the Directorate of Public Prosecutions.

Related The budget, 2016 elections and money laundering

What exactly is the mandate of UFIA?

The mandate of the FIA as en­shrined in section 19 of the Anti-Money Laundering Act, 2013 is the following:

Enhance the identification of the proceeds of crime and the combat­ing of money laundering

Ensure compliance with the Act

Enhance public awareness and understanding of matters related to money laundering.

Make information collected by it available to competent authorities and to facilitate the administra­tion and enforcement of the laws of Uganda.

Exchange information with similar bodies whose countries have trea­ties, agreements or arrangements with the Government of Uganda regarding money laundering and similar offences.

Additionally, under the Anti-Terror­ism Amendment Act, 2015 and the Anti-Terrorism Regulations, 2015 the FIA has the mandate to iden­tify and freeze funds and property linked to or suspected to be linked to terrorism and its financing.

What are the functions of the Au­thority?

The functions of the FIA are cap­tured in section 20 of the Anti-Mon­ey Laundering Act to be:

Shall process, analyse and inter­pret information disclosed to it and obtained by it in terms of the Act

Shall refer any matter or informa­tion derived from any report or information it receives to the ap­propriate law enforcement agency in Uganda if, on the basis of its analysis and assessment, it has reasonable grounds to suspect that the transaction would be relevant to the investigation or prosecution of a money laundering offence, a terrorist financing offence or a serious offence, and in their connection the Authority may send a copy of such referral or information to the relevant supervisory authority.

Inform, advise and cooperate with other shall competent authorities;

Shall give guidance to accountable persons, competent authorities, and other persons regarding compliance with the provisions of the Act.

Shall retain the information re­ferred to in paragraph (a) in the prescribed manner for a period of at least ten years;

Shall be responsible for the collec­tion of fines adjudicated under the Act.

Shall issue guidelines to account­able persons not under the jurisdic­tion of supervisory authorities in relation to customer identification, record keeping, reporting obligation and the identification.

May provide training programs for accountable institutions in relation to customer identification, record keeping, reporting obligations and the identification of suspicious transaction.

How far are you on delivering the mandate?

To deliver on our mandate and functions, the FIA has the following powers as provided in section 21 of the Anti-Money Laundering Act.

Establish its own structure, staffing levels and the terms and conditions of service as determined by the Board and approved by the Minister of Finance.

Assign employees and seconded personnel to particular posts within the Authority.

Establish rules and procedures for career development and disciplining of staff.

Manage the Authority’s finances and assets.

Obtain the services of any person by agreement, or from any govern­ment agency, to perform any spe­cific act or function.

Enter into contracts and acquire or dispose of any right in or to prop­erty.

Open and operate its own bank accounts.

Insure itself against any loss, dam­age, risk or liability.

Engage in any lawful activity, whether alone or together with any other organization in Uganda or elsewhere, aimed at promoting its objectives.

Obtain any information from ac­countable persons, supervisory agencies and law enforcement agen­cies in the performance of its func­tions in accordance with the Act.

Instruct any accountable person to take such steps as may be appro­priate in relation to enforcing com­pliance with the Act or to facilitate investigations anticipated by the Authority.

In accordance with the provisions of the Act enter the premises of any accountable persons during ordi­nary business hours to inspect for compliance with provisions of the provisions of the Act.

Make copies of records found in the possession of any accountable person.

Send a report on the activities of any accountable person to a com­petent authority if the Authority determines that there is an element of money laundering or terrorism financing.

In accordance with the provisions of this Act, halt any financial activ­ity in the event that a suspicion warning has been reported to the Authority.

Require any accountable person to carry out a risk based assessment of his or her customers as may be prescribed by regulations made under this Act.

Do anything that is incidental to the exercise of any of its powers.

The FIA has signed memoranda of understanding with key stakehold­ers like Uganda Revenue Authority, Capital Markets Authority, and is in discussion with other financial sec­tor regulators and other authorities in the Country to sign more MOUs.

The FIA has issued guidelines to the accountable persons prescribing forms for reporting large cash trans­actions and suspicious transac­tions to the FIA. These accountable persons are listed in the second schedule to the Act and include the following:

  1. Advocates as defined in the Advocates Act notaries licensed and certified under the Notaries Public Act, accountants as defined in the Accountants Act, and other independent legal professionals and accountants.
  2. A board of executors or a trust company or any other person that invests keeps in safe custody, con­trols, or administers trust property within the meaning of the Trustees Act.
  3. Casinos (which also includes internet casinos).
  4. Real estate agents.
  5. Dealers in precious metals and gems.
  6. Trust and company service providers not covered elsewhere in this Schedule which as a business provide any of the following services to third parties—

Acting as a formation agent of legal persons;

Acting as (or arranging for another person to act as) a director or sec­retary of a company, a partner of a partnership, or a similar position in relation to other legal persons;

Providing a registered office, busi­ness address or accommodation, correspondence or administrative address for a company, a partner­ship or any other legal person.

Providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;

Acting as (or arranging for another person to act as) a trustee of an express trust;

Acting as (or arranging for another person to act as) a nominee shareholder for another person.

7. A financial institution as defined in the Financial Institutions Act.

8. A broker, dealer or investment advisor licensed under the Capital Markets

Authority Act.

9. An insurance company licensed under the Insurance Act.

10. Registrars of Companies.

11. Registrars of Land.

12. The Uganda Investment Authority.

13. All licensing authorities in Uganda.

14. Any other person who conducts the business of:

Acceptance of deposits and other repayable funds from the public including private banking;

lending including, inter alia, consumer credit, mortgage credit, factoring with or without recourse, and finance of commercial transactions);

Financial leasing (not including financial leasing arrangements in relation to consumer products);

The transfer of money or value;

issuing and managing means of payment e.g., credit and debit cards, cheques, traveler’s checks, money orders, bankers’ drafts, electronic money;

Financial guarantees and commitments;

Trading in:

(i) Money market instruments (cheques, bills, CDs, derivatives, etc.),

(ii) Foreign exchange, exchange, interest rate and index instruments,

(iv) Transferable securities,

(v) Commodity futures trading;

(h) Participation in securities issues and provision of financial services related to such issues;

(i) Individual and collective portfolio management;

(j) Safekeeping and administration of cash or liquid securities on behalf of other persons;

(k) Otherwise investing, administering or managing funds or money on behalf of other persons;

(l) Underwriting and placement of life insurance and other investment related insurance, including non-life insurance business;

(m) Money and currency changing.

15. Non-governmental organizations, churches and other charitable organizations.

Who are your major stakeholders and why?

(1)The main stakeholders are the accountable persons listed above. These are the entities that provide the information that we work with.

(2) The other stake holders are the investigating bodies to which we provide the intelligence reports for their investigations. These are the Inspectorate of Government and the Police.

(3)The other stakeholders are the regulators of the accountable persons. Here we have Bank of Uganda, Capital Markets Authority, Insurance Regulatory Authority, Lotteries Board,

(4)The other category are the Authorities such as Uganda Revenue Authority, Uganda Registration Services Bureau, Uganda Law Society, Institute of Certified Public Accountants of Uganda, Uganda Bankers Association, Uganda Insurers Association, and NGO Board.

What does an average Ugandan need to know about money laundering?

Simply put, it is the process of cleaning or attempting to clean dirty money.

What must a country do to effectively implement the AML?

Have the relevant laws in place, and have a robust institutional framework to combat the laundering of money. Uganda is on the right track in this area following the enactment of the Anti-Money Laundering Act, 2013 and the Anti-Terrorism Amendment Act, 2015 and the Regulations thereunder of 2015 and the setting up of the Financial Intelligence Authority.

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