Trade-based money laundering (TBML) has over recent years become a commonly used method to launder money in Uganda according to a new policy memo published by Washington-based Global Financial Integrity (GFI) and Uganda-based public policy research and advocacy think tank, Advocates Coalition for Development and Environment (ACODE).

Trade-based Money Laundering in Uganda identifies key TBML risk factors in Uganda, including corruption, lack of coordination among stakeholders, lax oversight of free trade zones and limited understanding of TBML and techniques used. The memo says these risk factors serve as entry points for criminals to exploit the trade system for illicit financial activities.

TBML vulnerabilities

Vulnerability to TBML in Uganda cuts across a wide range of economic sectors and goods according to the memo’s authors.

They consulted with several stakeholders to identify commodities and products vulnerable to TBML mis-invoicing during their research, which also involved a literature review, interaction with key stakeholders through key informant interviews, stakeholder dialogue and a validation meeting.

Export vulnerabilities

The policy memo says the top 15 exports vulnerable to trade mis-invoicing are gold and gold compounds, petroleum products, other precious metals, sugar and sugar confectionary, coffee, hides and skins, fish and fish products, cobalt, vanilla, tobacco, iron and steel, cement, flowers, plastic products, and fats and oils

Among the exports, gold and gold compounds, petroleum products, other precious metals, cobalt, vanilla, flowers and plastic products appeared prominently among the vulnerable products.

Import vulnerabilities

The most vulnerable import commodities according to the memo include gold, petroleum and related materials, medical and pharmaceutical products, and road vehicles.

Other vulnerable imported items include industrial machinery and equipment, gas, fertilisers and minerals, electrical machinery and several foodstuffs.

Enhancing Uganda’s resilience

Recommendations offered by GFI and ACODE aimed at enhancing Uganda’s resilience against TBML include implementing beneficial ownership laws and enforcing effective sanctions systems.

Data sharing and coordination among stakeholders is also recommended, alongside raising awareness and providing training on TBML among private and public actors, and increasing support and funding to frontline agencies.

 The policy memo Trade-based Money Laundering in Uganda published by GFI and ACODE can be found here.

Categories: Trade Based Financial crimes News