Uganda removed, Kenya, Namibia added on financial grey list

The Financial Action Task Force (FATF), a global body mandated to counter threats of abuse of the financial system by criminals and terrorists, has removed Uganda from the grey list.

However, Kenya and Namibia have been placed on the grey list, meaning that the countries are Jurisdictions Under Increased Monitoring.

This was revealed on Friday at the 5th FATF plenary taking place in Paris, France under the two-year Singapore Presidency of T. Raja Kumar.

Grey list refers to countries that have deficiencies in dealing with money laundering and terrorist financing.

The removal of Uganda from the grey list follows a recent onsite assessment to verify its reforms for anti-money laundering and countering the financing of terrorism in the country.

Sam Were Wandera, the Executive Director of the Financial Intelligence Authority, welcomed the decision, describing it as a testimony to hard work by all stakeholders.

“Being removed from the FATF grey list is a testament to Uganda’s commitment to strengthening its anti-money laundering and counter-terrorism financing framework. It demonstrates our dedication to upholding global standards and combating financial crime,” he said.

“This achievement opens up a world of opportunities for our economy. It boosts investor confidence, encouraging foreign investment and fostering economic growth. It also enhances our reputation on the international stage, making us a more attractive destination for business,” Mr Wandera added.

Working with FATF, Uganda successfully completed the reforms for combating money laundering, countering terrorism financing and proliferation financing in line with international standards.

FIA said removal from the grey list signifies that Uganda’s financial system is now recognized as more robust and resilient.

“This protects the integrity of our financial institutions and safeguards the interests of ordinary Ugandans, ensuring a more stable financial environment,” they added.

Also removed from the grey list were UAE, Barbados and Gibraltar.

In Kenya, Treasury Cabinet Secretary Njuguna Ndung’u confirmed being placed is on the grey list.

“Kenya has officially been placed on its ‘grey list,’ indicating enhanced monitoring to ensure compliance with international Anti-Money Laundering, Countering the Financing of Terrorism, and Proliferation of Weapons of Mass Destruction (AML/CFT/CPF) obligations,” he said.

An analysis of SWIFT data between 2004 and 2014 indicated that Grey-Listing by FATF appears to lead to a reduction of up to 10% in payments received by the listed country from the rest of the world.

A recent study by IMF in 2021, which used machine learning techniques, also found that there was a significant effect of Grey-Listing on capital inflows, with a decline on average of 7.6% of GDP when the country is added to the Grey List.

Mohamed Wehliye, a Kenyan financial risk adviser, said: “One of the reasons we’ve been grey listed by FATF is because lawyers have been diluting AML/CTF legislation. 1st, they did monkey business with MPs to remove themselves from purview of AML/CTF laws. Later they agreed to self regulate as opposed to being full reporting agents.”

“We are now grey listed and the whole country suffers because greedy lawyers want to conceal transactions in ‘clients accounts’ for the corrupt & all sorts of thieves. Being grey listed means we are now seen as a wash wash country run by lawyers,” he added.

The global Anti-Money Laundering/Combating of the Financing of Terrorism (AMF/CFT) grey list comprises countries with enforcement weaknesses and are subject to intense monitoring to upgrade their compliance ratings.

Prolonged compliance failure leads to the blacklisting of a defaulting country in the international financial system; a step that can disrupt the usage of electronic financial transfers, letters of credit, and movement of overseas financial remittances between the affected country and foreign commercial banks.

Uganda was demoted to the FATF grey list in early 2020 following persistent failure to mitigate various loopholes in its AML/CFT enforcement regime.