The May 10, 2022 statement reads in part: “As of 6th June 2022, WorldRemit, a leading digital payments platform, will not be facilitating any new outbound / send transactions from Uganda. Customers receiving funds in Uganda are not affected by this decision and will be able to continue to receive funds via the WorldRemit service without disruption through the company’s existing partner work.”
The statement added: “It is our continued goal to ensure we are offering the greatest value for our customers around the world, and to do so, we occasionally have to make difficult decisions that impact a small number of customers. As part of our strategy, we have, therefore, decided to no longer support outbound money transfers from Uganda, as well as a handful of other countries across the world. Customers in these countries will, however, continue to be able to receive money through WorldRemit from abroad.”
While appearing before the finance committee of parliament in January 2022, Sydney Asubo, the executive director of the Financial Intelligence Authority, said Uganda risked being blacklisted by the Financial Action Task Force (FATF) if the government did not tackle money laundering by May 2022.
Asubo also informed the committee that Uganda had been placed under the grey list by the Financial Action Task Force. According to Asubo, placing the country on the grey list was already affecting people because of the excessive scrutiny that now came with the transfer of funds, most especially through banks.
“Some people have already started feeling the impact, especially international transactions, which would take a day or two but are now taking a week or two. That process of scrutiny is beyond the normal scrutiny,” Asubo said.
The Financial Action Task Force is a global inter-governmental organization policy-making body established by the G7 countries of Germany, United States of America, Canada, France, Italy, Japan, the United Kingdom, and the European Union states. The task force’s major purpose is to establish international standards, and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism.
As of March 2022, Uganda was still on the list of 25 countries regarded by the European Union as high-risk countries. Other countries on the list are North Korea, Iran, Haiti, Jamaica, South Sudan, Panama, etc. According to the European Union, the 25 countries were identified as having strategic deficiencies in their anti-money laundering and countering of financing terrorism activities.
Although Uganda’s finance ministry had committed to addressing the loopholes by May 2022 after failing to meet the initial deadline of January 2022, The Observer has established that Uganda was still lagging as the second deadline of May 2022 closed in. If Uganda has not submitted any documents to the task force by the end of May 2022, the country will then be moved to the blacklist.
Jim Mugunga, the finance ministry spokesperson, dismissed claims that WorldRemit’s suspension of outbound services from Uganda was linked to the country’s failure to fulfill the recommendations of the Financial Action Task Force.
Mugunga emphasized that since Uganda operates a liberal market economy, it was okay for investors and service providers to enter and exit at leisure. He downplayed any possibility that their decision could negatively affect the economy.
He said: “WorldRemit had just entered the economy and it wasn’t the major service provider in the funds transfer sector.” Mugunga later referred other questions to the Bank of Uganda for comment.
Mugunga added that Uganda is obliged to observe and respect international basic standards as recommended by the FATF since Uganda doesn’t operate in a vacuum. He added that ever since Uganda’s updates to their submissions to the FATF were rejected, the government and other relevant bodies had taken different initiatives to strengthen regulatory and collaboration frameworks with partners.
“There are so many triggers currently in place and I am sure several users have noticed them. There’s an entire law, the National Payments Systems Act, that has now streamlined the operations of mobile money, which weren’t in place in the previous evaluation. Banks can no longer allow customers to open accounts without their national identity cards. This is proof that reasonable progress is taking place. Taking on the recommendations by the task force cannot be done as a one-off. It has to be systematic”
Responding to questions shared through Twitter, WorldRemit said that their suspension of outbound services from Uganda was a business strategy, not a money laundering issue.
While speaking to The Observer, Kelsey Costales, the WorldRemit public relations lead for the Americas, said, “The decision was not made as a result of the recent Financial Action Task Force activity.” Asked whether it was only Uganda affected by the suspension of outbound services, Costales added, “Uganda, along with Singapore, Hong Kong, Rwanda, Somaliland, and Tanzania, were part of our license closure”.
According to recently released data by Money Transfer Companies, a financial transfer website, WorldRemit ranks fourth among the top ten global money transfer companies.
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