FATF status

Uganda is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 23 February 2024

The FATF welcomes Uganda’s significant progress in improving its AML/CFT regime. Uganda strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020 including by: (1) adopting a national AML/CFT strategy; (2) enhancing the use of MLA and maintaining statistics; (3) developing risk-based supervision of the financial and DNFBP sectors; (4) assessing the ML/TF risks related to legal persons and ensuring that competent authorities have timely access to accurate basic and beneficial ownership information; (5) pursuing ML investigations and prosecutions, applying ML charges consistent with the country’s risk profile and establishing procedures to trace and seize proceeds of crimes; (6) demonstrating an ability to conduct TF investigation and prosecution; (7) addressing the technical deficiencies in the legal framework to implement PF-related TFS; (8) developing an outreach and risk-based oversight plan to protect its NPO sector from potential TF abuse. Uganda is therefore no longer subject to the FATF’s increased monitoring process.

Uganda should continue to work with ESAAMLG to sustain improvements in its AML/CFT system, including by ensuring its oversight of NPOs is risk-based and in line with the FATF Standards rather than classifying all NPOs as obliged entities. Uganda is strongly encouraged to continue cooperating with ESAAMLG on this issue.

Compliance with FATF Recommendations

The last follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Uganda was undertaken in 2024. According to that Evaluation, Uganda was deemed Compliant for 16 and Largely Compliant for 9 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Uganda has established laws and institutions to combat corruption, including the Public Procurement and Disposal of Public Assets Authority Act, which mandates conflict of interest disclosures. Despite these measures, corruption remains pervasive, significantly hindering investment, as highlighted by Uganda's low ranking in Transparency International's Corruption Perceptions Index. The lack of enforcement and the prevalence of impunity for well-connected individuals further complicate the situation, making it difficult for foreign companies to navigate government procurement processes.

Uganda's economy is characterized by a market system with significant opportunities for investment, particularly in sectors like oil, agriculture, and services, which collectively contributed to a 5.2% growth in the fiscal year 2022/23. Despite recovering from the COVID-19 pandemic, challenges such as corruption, high inflation, and political instability pose risks for investors, while foreign direct investment surged by 79.2% in 2023, largely driven by pre-first oil investments.

Uganda's investment climate offers significant opportunities, particularly in sectors like oil, agriculture, and technology, driven by a young, English-speaking population and ongoing economic recovery post-COVID-19. However, investors face challenges such as persistent corruption, human rights violations, and an uncertain political environment, especially with the upcoming 2026 elections. Despite these risks, Foreign Direct Investment (FDI) surged by 79.2% in 2023, largely due to pre-first oil investments, indicating a complex but potentially rewarding landscape for U.S. investors.