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Why Among needs to carry lots of cash

Anita Among in office

Anita Among in office

We can’t predict when — or if — the sanctions will come but when they do, the timing and tone of the announcement deliver a hefty dose of unexpected drama and tension.

First, it was the towering former Police chief General Kale Kayihura who got flat-felled in 2019. And in December 2021, Maj Gen Abel Kandiho, head of the Chieftaincy of Military Intelligence (CMI), was sanctioned by the USA Department of the Treasury’s Office of Foreign Assets Control (OFAC) together with high-profile Iranian and Syrian officials for serious human rights abuse and repressive acts targeting innocent civilians, political opponents and peaceful protestors.

And now the UK recently imposed sanctions on three Ugandan officials— Anita Among, Speaker of parliament, and former ministers Gorreti Kitutu and Agnes Nandutu—accused of embezzling funds intended for impoverished communities in Karamoja, specifically involving an iron sheet scandal.

These sanctions, announced by the UK’s Foreign, Commonwealth and Development Office, mark the first application of the UK’s Global Anti-Corruption Sanctions regime against individuals linked to corruption in Uganda. Among had been implicated in diverting iron sheets meant for Karamoja, though she returned the 500 pieces she was accused of misappropriation but was not formally charged.

Parliamentary spokesperson, Chris Obore, suggested in a statement issued on April 30, that the sanctions might be influenced not just by the corruption allegations but also by her support for the Anti-Homosexuality Act of 2023, highlighting a potentially complex political backdrop to the sanctions.

Days later, Among stated that she was punished for presiding over the passage of the internationally condemned Anti- Homosexuality Act.

The sanctions against Among and the two former ministers include travel and asset freezes. Asset freezes prohibit any UK citizen or business from dealing with the assets of the sanctioned individuals if located in the UK. This action is part of a broader effort by the UK to combat serious global corruption, signaling a clear message against the misuse of power for personal gain.

The implications of these sanctions extend beyond the immediate legal and economic consequences for the individuals involved. Among’s responses have highlighted her limited grasp of the wider ramifications of the sanctions. She has derided the sanctions, stating that she doesn’t even own a pet cat in the UK. She has further urged the authorities there to proceed with freezing her assets.

“These sanctions are politically motivated. I am carrying a cross for the ‘48 million’ Ugandans.” Among insists that UK sanctions imposed on her for allegedly being corrupt are because of her support for the anti-homosexuality law.

On the surface, a sanctioned individual is barred entry into the UK, and any assets he or she owns there are frozen. But broadly, the imposition of sanctions by the UK could prompt other nations, particularly allies such as Australia, Canada, the USA and EU member states, to impose similar travel and cash restrictions.

These countries often coordinate or follow suit with their allies’ sanctions, especially when they pertain to corruption and human rights violations. Sanctioned individuals may encounter growing challenges in conducting financial transactions both internationally and domestically, particularly in cashless transactions.

According to expert sources familiar with sanctions and their far-reaching implications, the UK sanctions could severely impact individuals in several ways.

Asset freezes: The direct impact of the sanctions includes freezing of assets held within the jurisdiction enforcing the sanctions—in this case, the UK. However, the influence of the UK in global finance means that these sanctions could extend to freezing assets held in international accounts, particularly in allied countries.

This would prevent the sanctioned individuals such as Among from accessing any funds or economic resources they own or control within these territories.

Banking and financial services: Banks and financial institutions in the EU, USA, and other allied nations generally comply with international sanctions to avoid penalties and preserve their reputational integrity. As a result, the sanctioned individuals might face difficulties in accessing banking services, securing loans, or carrying out international financial transactions.

Anita Among handing over a dummy cheque recently
Anita Among handing over a dummy cheque recently

SWIFT SYSTEM

If the UK and allies decide to get the sanctioned officials off the global SWIFT system, that could seriously cripple their ability to transact both internationally and locally in the financial system.

SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, is a global messaging network used by banks and other financial institutions to securely transmit information and instructions through a standardized system of codes. Established in 1973, SWIFT facilitates the rapid and secure exchange of financial messages concerning payments, securities, trade transactions and treasury operations among its members.

SWIFT does not handle the transfer of funds itself but provides the communication infrastructure to send payment orders that need to be settled by correspondent accounts that institutions have with each other. Each financial institution on the network is assigned a unique code known as a SWIFT code or Bank Identifier Code (BIC), which is used to send money across borders efficiently.

SWIFT is crucial for international finance because it ensures the fast, accurate and secure communication necessary for completing cross-border transactions. It connects over 11,000 financial institutions in more than 200 countries and territories, making it one of the leading networks for international financial messaging.

If the UK uses its influence on the SWIFT system, that could seriously affect the sanctioned individuals, such as Among and her colleagues.

Here’s how:

Blocking financial transactions: SWIFT facilitates the majority of global banking communication. If the UK decides to leverage its position to influence SWIFT operations regarding sanctioned individuals, it could effectively block or monitor the financial transactions of those individuals.

By restricting their access to SWIFT, the UK can prevent Anita Among and others from conducting international financial transfers, which would severely limit their ability to operate globally.

Isolation from international banking: Being cut off from SWIFT would mean that banks worldwide that comply with these sanctions would not process transactions involving the sanctioned individuals. This isolation from the international financial system complicates any attempts to move, access, or utilize funds stored in foreign banks, essentially crippling the individual’s financial mobility.

Increased scrutiny by financial institutions: Banks and financial institutions often use SWIFT messages to conduct due diligence. If the system flags individuals as sanctioned, banks are likely to conduct enhanced scrutiny on any transactions associated with them, further limiting their ability to engage in financial activities.

In the specific case of Anita Among, her role as a high-profile political figure could mean that her financial activities are more likely to be international in scope, involving significant transactions. UK’s influence on SWIFT could effectively ensure that she faces substantial hurdles in accessing international financial markets, thereby amplifying the impact of the travel bans and asset freezes.

EXPERT ANALYSIS

Fred Muhumuza, an economist, stated that the sanctions imposed on the speaker of parliament, Anita Among and two former ministers, do not affect banks, as they target an individual rather than the entire country, unlike the cases of Russia and Iran. Locally, Dr Muhumuza noted that the speaker might not be significantly affected because SWIFT operates country-to-country and institution-to-institution.

Only UK banks are required to comply with the sanctions, meaning her assets and financial transactions in Uganda or other countries like America are unlikely to be affected unless those nations also decide to impose sanctions.

“So, SWIFT will only enforce sanctions within the UK, where their jurisdiction ends. If other countries wish to support or align with the UK’s sanctioning system, they might, but it won’t have significant impacts on the country as a whole, nor on the banking sector. So, should moneylenders be worried about the sanctions? Not really, unless they are directly dealing with Anita Among,” he explained.

Speaking to a financial and market analyst who wished to remain anonymous, he explained that while these are individual sanctions that don’t directly affect banks, there is still a risk of banks being sanctioned and fined by SWIFT because it operates a global network. In this regard, most banks tend to avoid conducting financial transactions with sanctioned individuals.

“Most banks will act quickly to freeze their finances and cease transactions with them,” he stated.

“One thing you’ll find is that it becomes problematic to transfer money or access banking services, including mobile money, because it’s regulated by the Bank of Uganda, which is part of the SWIFT settlement system. Even something as ubiquitous as mobile money becomes inaccessible. You’re reduced to dealing with cash and making individual payments, but if you want to make any significant transactions, especially moving money across borders, you’ll find it nearly impossible to move any substantial amount of cash within a given region. That is the real problem,” the financial analyst added.

Additional reporting by Timothy Nsubuga & Devon Suubi

Comments

+4 #1 WADADA rogers 2024-05-08 11:55
Lets leave this woman carry her cross that she said belongs to 45M Ugandans
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+3 #2 Michaeli 2024-05-08 14:22
Plainly put, all banks globally will be expected to stop serving her.

All banks that use Pound, Euro, USD (which is almost all banks) use the sanctions lists and do not serve sanctioned individuals.
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+3 #3 kabayekka 2024-05-09 08:31
Surely my lady speaker, those who crucified Jesus on the cross were not necessarily homesexuals but some what evil. The man Jesus had no case to answer in the courts of Pilate.

The man was a medical doctor curing all sorts of human diseases. He was preaching a message of hope for humanity etc... Your case my lady speaker is pending. Gwebakwata nebibbe?

One believes that the British government is just tired of sharing the profits of the corrupt Africans who are very rich like former President of Zaire or Democratic Repulic of Congo. It is lucrative for these rich Africans to invest much of their capital abroad.
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