BANK OF UGANDA

OFFICE OF
THE EXECUTIVE DIRECTOR
SUPERVISION

EDS.306.2

15 October 2019

37-45 KAMPALA ROAD,
P.O. BOX 7120,
KAMPALA

DIRECT LINE: 256-414-230051
GENERAL LINE: 256-414-258441
Ext 2403
FAX LINE: 256-414-258515
TELEX: 256-414-61059

CABLES: UGABANK
Email: info@bou.or.ug
Web site: www.bou.or.ug

Circular to all Chief Executives of Commercial Banks, Credit Institutions and Microfinance Deposit-Taking Institutions

Regular Risk Assessment of the Money Laundering and Terrorism Financing (ML/FT) – Regulation 8 of the Anti-Money Laundering Regulations, 2015

The Financial Action Task Force (FAFT) Recommendation 1 – Assessing ML/TF risks and applying risk-based approach requires that countries should identify, assess and understand the Money Laundering and Terrorist Financing (ML/TF) risks that they are exposed to, and should take action at ensuring that the risks identified are mitigated effectively. In fulfilment of this requirement, the Financial Intelligence Authority (FIA) conducted a ML/TF National Risk Assessment (NRA) in March 2017. Subsequently, the FIA organized a dissemination workshop on the findings of the NRA Report to enable all stakeholders, including the Supervised Financial Institutions (SFIs), to understand and know the ML/TF risks and vulnerabilities that Uganda is exposed to, and the proposed mitigation measures that have been put in place to address them.

In view of the foregoing, Bank of Uganda wishes to advice all SFIs that in order to implement/comply with Regulation 8 of the Anti-Money Laundering (AML) Regulations, 2015, which includes a requirement that SFIs should conduct regular ML/TF risk assessment, the following guidance should be taken into consideration by SFIs:

i. The findings of the National Risk Assessment (NRA) Report must be taken into account during the conduct of the individual SFI’s ML/TF Risk Assessment;

ii. The ML/TF high risks sectors and countries identified in the NRA Report must be incorporated into the individual SFI’s ML/TF Risk Assessments;

iii. The SFI should ensure that its AML/CFT regime addresses such risks through enhanced measures to manage and mitigate the risks.

Mission: To Foster Price Stability and a Sound Financial System Vision: To be a Centre of Excellence in Upholding Macroeconomic Stability

The SFIs should access the copy the ML/TF National Risk Assessment (NRA) from the Financial Intelligence Authority Website on the following links:
https://fia.go.ug/publications/money-laundering-and-terrorist-financing-national-risk-assessment-report or https://fia.go.ug/sites/default/files/publications/Money%20Laundering%20And%20Terrorist%20Financing%20National%20Risk%20Assessment%20Report%201.pdf

The above directives (i) – (iii) should be implemented by the SFIs with immediate effect.

SFIs should, therefore, conduct a comprehensive review of their respective ML/TF risk assessment to ensure that it satisfies the guidance issued under in this directive. Bank of Uganda may, at any time, require a SFI to avail the most recent results of the risk assessment carried out under Regulation 8(1) of the AML Regulations, 2015 for purposes of the conduct of its AML/CFT Risk Based Supervision.

[Signature]

Charles Owiny Okello
Ag Executive Director Supervision