A recent report by Global Financial Integrity (GFI) reveals that Uganda could be losing over $2 trillion annually to illicit financial flows (IFFs), with trade misinvoicing alone estimated to have created a $6.6 billion gap between what Uganda reported trading and what its trading partners reported between 2006 and 2015. The report highlights the role of professionals such as lawyers, accountants, real-estate agents, and trust and company-service providers in facilitating the movement and legitimization of illicit wealth.
The GFI report, titled "The Enablers Gap: Assessment of the Shadowy Craftsmen of Illicit Wealth," focuses on Uganda, Kenya, and Ghana, and notes that IFFs cost Africa at least $50 billion annually. The report's authors argue that behind nearly every significant movement of illicit capital across these jurisdictions stands a professional enabler who provides the corporate structures, transactions, and professional services necessary to move, conceal, or legitimize questionable wealth.
In Uganda's case, the report expresses concern not only that professionals may be used to move illicit wealth but also that the country's oversight of these professions has significant gaps. While Uganda's anti-money-laundering framework brings lawyers, accountants, real-estate agents, and trust and company-service providers within the category of accountable persons, GFI points to limited suspicious-transaction reporting from some of these sectors and weaknesses in supervision and enforcement.
The report cites several case studies, including "Uganda v. Serwamba David Musoke & Others (2015)," in which fraud at Equity Bank's Oasis Mall branch in Kampala showed how illicit proceeds could move rapidly from a financial institution into the legitimate economy. Investigators traced part of the proceeds into land, vehicles, and businesses, with the case also involving external accomplices and professionals who helped move or conceal the money.
Another case cited by the report is "Uganda v Kamya Valentino & 3 Others," in which Kamya Valentino, an accountant at the Embassy of Sweden in Uganda, diverted about $8.4 billion from the embassy between 2016 and 2019. The report notes that the money did not simply remain in bank accounts but was transferred into accounts controlled by his wife and father-in-law, and used to acquire prime real estate and high-end vehicles.
The report argues that Uganda's corporate registry is one of the first places investigators should be able to look when trying to establish who ultimately controls a company, but gaps in beneficial ownership information can create opacity that professional enablers exploit. While Uganda now requires companies to maintain beneficial ownership registers, GFI has previously warned that inadequate ownership information can handicap efforts to trace illicit proceeds.
The Financial Intelligence Authority (FIA) classifies professional enablers as "accountable persons" under Uganda's anti-money-laundering framework, placing obligations on them to identify clients, conduct due diligence, and report suspicious transactions. However, the scale of suspicious activity detected from these sectors, the number of cases referred for investigation, and the sanctions imposed on non-compliant professionals remain unclear.
Key points
- Uganda loses over $2 trillion annually to illicit financial flows.
- Professionals like lawyers and accountants play a significant role in facilitating the movement and legitimization of illicit wealth.
- Gaps in beneficial ownership information and oversight of professional enablers hinder efforts to trace illicit proceeds.
