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Mobile Money tool for terrorism financing – report

Kampala — The US government has in its Global Terrorism Index report warned about mobile money services in Uganda as being vulnerable to exploitation by criminals and terrorists to finance illicit activities in and out of the country.

The Department of State in the 2017 country report on terrorism indicated that while Uganda’s Anti-Money Laundering (Amendment) Act requires financial institutions to conduct comprehensive customer due diligence, it does not put the same requirements on mobile money transfers.

“Banking institutions do not monitor mobile money payments and transfers in Uganda; mobile money transactions are instead under the purview of the individual telecommunications company that facilitates the specific transaction,” the report reads in part.

Bank of Uganda revealed last December that with 22 million subscribers currently registered for mobile money, the platform had become instrumental in bringing Ugandans into the formal banking sector. Transactions were reported at Shs54 trillion at the time.

The findings by the Department of State released on Wednesday in Washington reinforces earlier findings by the Financial Intelligence Authority, which listed forex bureaus, mobile money transfer firms, and real estate as the possible conduits for terrorism financing.

The Department of State also revealed that the Ugandan government had made important contributions toward countering terrorism in East Africa and the Horn of Africa last year, and had demonstrated strong and sustained political will to apprehend suspected terrorists and disrupt terrorist activity in its territory.

Some of the strides made include ratifying all relevant UN conventions relating to money laundering and terrorism finance such as the Anti-Money Laundering (Amendment) Act to address deficiencies in the principal Act, amended the Anti Terrorism Act, conducted a money laundering and terrorism finance national risk assessment, and established an anti-money laundering/countering terrorist finance National Task Force.

The report, however, indicates that “government at times labelled conventional criminal acts as terrorism and leveled terrorism charges against journalists, public officials, and others the government deemed were acting against its interests, potentially diverting attention and resources from core counterterrorism goals.”

It also reveals that Washington continued to provide capacity-building assistance, through the antiterrorism assistance programme, to the Uganda Police’s Directorate of Counterterrorism, the lead law enforcement unit charged with investigating, disrupting, and responding to terrorist incidents.

The report says resource and training gaps, as well as corruption, affected the police’s overall capacity to detect, deter, and respond to terrorist incidents.

Government has also been tasked to urgently formulate the action plan on countering violent extremism as recommended by the UN secretary general’s Preventing Violent Extremism Plan of Action.

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