Mobile money systems pose the biggest challenge to Ugandan agencies fighting illicit financial flows. The country’s Financial Intelligence Authority in investigating seven suspicious transactions that were reported by the financial sector between June 2016 and September 2017.
Between June 2016 and September 2017 seven suspicious transactions were reported by the financial sector, according to Financial Intelligence Authority (FIA). Commercial banks reported all but one of the cases, which was filed by a remittance company. The transactions are under investigation.
Huge volumes of small transactions handled by mobile money services in the face of minimal surveillance have enabled swift movement of funds for terrorist groups.
“Terrorism financing is harder to tackle, compared with money laundering, because it is channelled through legitimate channels like mobile money services and involves small amounts, estimated at less than $1,000 per transaction,” said a senior manager at FIA.
He said terrorist organisations usually run small restaurants, fuel stations and transport companies.
“The low number of suspicious transactions recorded in our financial sector may point to changes in the way terrorists move money across borders and not necessarily a decline in terrorism financing risks. The growing use of virtual currencies like Bitcoin require more innovative methods among security agencies to contain the flow of cash to terrorists,” the manager said.
Major sources of terrorist risks for Uganda include Somalia and the Democratic Republic of Congo, war-torn countries that have created a safe haven for terror groups.
Uganda’s military intervention in Somalia since 2007 has also made the country a target of extremist groups. Al Shabaab terrorists killed more than 90 people at two pubs in Kampala during the July 2010 World Cup final while the Allied Democratic Forces killed several people in bomb attacks in 1998.
Under Ugandan law, transactions related to terrorism must be reported to the FIA within 48 hours. The FIA then requests the Director of Public Prosecutions to apply for a court order to freeze the affected monies. FIA also deals with laundering of incomes earned from corruption and human, gun and drug trafficking.
-By Bernard Busuulwa