Uganda - Threat Assessment - 2020 Page 1 of 41 slaves, and an incidence of 7.6/1000 people � and a “B” response. US Trafficking in Persons Tier 2 watchlist rating. Section 1 - Executive Summary Sanctions & : There are no sanctions Grey Lists: Uganda is listed by FATF & is against the country. Uganda is a Tier 2 proposed by the EU on their “Grey” list. (Moderate threat) PPI 2019 (Proliferation) Index Uganda is not listed by the US as a “Country of Country with a “Low” response score of Primary Concern” in respect of ML & FC. 295/1,300. Uganda has a “Low” impact score (3.957/10) in the Global Terrorism Index 2019. NRA: Uganda published its first NRA in 2017, Uganda is included in US Country Reports on with findings that domestically most proceeds- Terrorism. generating predicate offences are , fraud, tax crimes, and counterfeiting of goods. Response & Resilience: FATF MER 4th round In terms of numbers of reported/detected results by ESAAMLG were 50/100 for technical cases, fraud is the most reported/detected compliance (40 Recommendations) & 0/100 crime, followed by tax crimes and corruption. for effectiveness (11 Outcomes). Uganda External or transnational threats are drug scored 3.63/10 for resilience (Low), ranked trafficking, human trafficking, smuggling and 29/54 for Africa in the OC Index. wildlife offences, as well as some elements of Indices: Uganda scored 34/100 and was rated tax evasion. “not free” in the 2019 Freedom in the World Organised Crime: According to the 2019 OC report and 59.5/100 for economic freedom Index, High Criminality - Low Resilience. (Heritage Foundation) described as “mostly Criminality 6.05/10, (ranked 12th highest of 54 unfree”. The Mo Ibrahim Index of African African countries. Main markets are illegal Governance (IIAG) scored Uganda 20th in timber (7/10), illegal mining (7/10), wildlife Africa at 55/100 (2017). The Basel AML Index crime (6.5/10) and drugs (cannabis (7/10). The 2017 ranked Uganda with a score of 7.95/10, main “Criminal Actors” are “Foreign ranked 10/146. Actors” (7.5/10), “State Embedded Overall Ratings: Uganda is rated the 35/40 in Actors” (7.5/10), “Criminal Networks” (6.5/10), SSA and 8/10 in , with an overall risk and “Mafia Style Groups” (5.5/10). score of 27/100 “Very High” risk, 30/100 “High” Corruption: TI CPI - 2019 - ranked 137/198, level for Threats and 23/100 “Low” level for with a score of 28/100, an improvement from Response, with a “Neutral” trend. 2016, where Uganda had a score of 25/100.

Modern Slavery: The 2018 GSI Index: 16/51 FCN Rating: “Very High ” Risk 27/100 African countries, with 304,000 modern day Trend “Neutral”

Uganda - Threat Assessment - 2020 Page 2 of 41 Section 2 - Country Dashboard

Uganda ➡ Neutral Capital & Population: / 45.7 million approx Political Leader: , President (since 1986) GDP: US$27.4 billion (2018) - 1.7% of the SSA economy. Economic Sector Breakdown: Agri (28%), Ind (21%), Services (51%) Exports: coffee, cotton textiles, flowers, fish and gold to 17.7%, UAE 16.7%, Democratic Republic of the Congo 6.6%, Rwanda 6.1% and Italy 4.8% (2017). Imports: vehicles, capital equipment, petroleum products, medical supplies and cereals from China 17.4%, India 13.4%, UAE 12.2%, Kenya 7.9%, Japan 6.4%, Saudi Arabia 6.3%, Indonesia 4.4% and South Africa 4.1% (2017).

Score: 27/100 “Very High” FCN Risk Rating (Average Country Score is 43 - SSA) Proceeds / Laundering Rank: 35/40 SSA - 8/10 Region EA range 10% - 12% GDP / 70-76% of Proceeds

Organised Crime Costs of Corruption range up to approx (State 34 - 36% of Proceeds range up to approx 15 - 20% of Proceeds Embedded 7.5/10, Criminal Actors 6.5/10, Foreign Networks 7.5/10 & Mafia Style 5.5/10)

Total Criminal Proceeds in Sub Uganda Higher (Inherent) Risk Factors Saharan Africa in US$ Billions - FCN 2020 (not including fraud and Customer Sector Geography corruption and tax evasion) Risks Risks Risks

Customers with elevated Banks (in particular retail Major export / import exposures to criminal and corespondent banks) partner countries (trade activities such as: mispricing via IFFs). Mining Fishing drug trafficking, arms Money remitters, casinos, 10 2.5 trafficking, wildlife dealers in precious metals Near neighbour countries, Wildlife trafficking, human & stones, forex dealers, including DRC & CAR 2 Goods Piracy trafficking real estate & lawyers (gold). 9 & people smuggling, Afghanistan Pakistan, SE fraud, terrorism finance & & hawala dealers. Asia and Western Europe, Logging along with corruption (e.g as source and destination 12.5 PEPs) which also help countries with East African Modern Slavery facilitate these crimes & countries as transit 8.3 tax evasion as a high risk Countries (heroin) & concern also South America (cocaine) Drugs & South Sudan (arms). 3 to Higher Risk Sectors Theft 15 and/or Geography Risks Tanzania, Uganda, DRC, China & Vietnam (wildlife products) & UK (luxury cars).

FCN SSA Country Risk Rating - “High” Threats -

GTI GSI INCSR TI CPI US TIP Overall WEF OC US Terror IUUF Index OC Index GFI IFF’s US END Wildlife

FCN SSA Country Risk Rating - “Low” Response -

NRA Freedom OC Index FATF 40 FATF 11 Overall Governance GSI - Slavery Proliferation Seizures US$ Basel AML Index FATF/EU Lists

Uganda - Threat Assessment - 2020 Page 3 of 41 3. Country Information

People & Geography: Uganda is a landlocked economy is made up of agriculture 28.2%, country in Eastern Africa, bordered to the East industry 21.1%, services 50.7% and these by Kenya, to the north by South Sudan, to the sectors encompass sugar processing, brewing west by the DRC, to the south-west by Rwanda, tobacco, tourism, cotton textiles & steel and to the south by Tanzania. The country is production as well as financial services, often referred to as ‘the land gifted by nature’ information and communications technology, thanks to it’s diverse landscape which education, hospitality and property encompasses the snow-capped Rwenzori development. Uganda exports coffee, cotton mountains, the Bujagali Falls, the Queen textiles, flowers, fish and gold to Kenya 17.7%, Elizabeth National Park and the immense Lake UAE 16.7%, Democratic Republic of the Congo Victoria, where Uganda’s capital Kampala is 6.6%, Rwanda 6.1% and Italy 4.8% (2017). The located. Kampala is the administrative, country imports vehicles, capital equipment, economic, legislative and judicial nerve centre petroleum products, medical supplies and for the country. Of its 45.7 million population1, cereals from China 17.4%, India 13.4%, UAE Uganda counts some 1.7 million of migrants 12.2%, Kenya 7.9%, Japan 6.4%, Saudi Arabia for 2019, and 735,000 emigrants. 6.3%, Indonesia 4.4% and South Africa 4.1% (2017). Recent History & Leadership: Uganda became a British protectorate in 1894, Environment: According to the Environmental and was given a legislative council in 1921. In Performance Index3, Uganda is ranked 1962 Uganda became independent, with 145/180 countries, with a score of 44.3/100. as Prime Minister. The period since then has been marked by violent Tourism: The total contribution of travel & conflicts, including an eight-year-long military tourism4 to GDP was UGX6,888.5bn dictatorship led by , and a lengthy civil (USD1,913.9 million - 7.3% of GDP in 2017. war against the Lord’s Resistance Army in the The labour force for this sector is more than Northern region. Despite Uganda’s troubled 229,000 in direct employment, representing past, the country has been experiencing 2.4% of the total employment rate in country. consistent economic growth and serves as an Some of the main tourist areas include: the economic hub for a number of neighbouring Bwindi National Park, Baha’i Temple, Fort Patiko countries like the Democratic Republic of the and the Mount Elgon National Park. Congo, South Sudan, and Rwanda. Uganda’s current president, Yoweri Museveni, is the Finance: In terms of remittances, the country country’s longest serving leader, having held has estimated inflows of US$1.29 billion (4.2% the position since 1986. He is also expected to of the GDP) for the year 2019 according to the stand again with the aim to retain his World Bank5. Connectivity-wise6, there is an presidency in the upcoming 2021 elections. internet penetration rate of 24% & 26.83 million mobile connections for the year 2020. Economy & Trade: In 20182, the GDP was With regard to access to the banking system, USD27.4 billion, which represents 1.7% of the 33% of the population over 15 years of age SSA economy. The government revenues hold bank accounts, 2.3% of the population amount to US$3.848 billion. The GDP per (over 15 years of age) have a credit card & 51% capita in 2017 was US$2,400. Uganda’s have a mobile money account.

Uganda - Threat Assessment - 2020 Page 4 of 41 4. Country Ratings

Available information from leading sources produce over 60 ratings for Uganda, covering both threats and responses in fighting financial crime, sanctions, proliferation finance and terrorism & terrorism finance.

Source Uganda � Source Uganda � Source Uganda �

World Economic Forum 46.8 / 100 Transparency International (TI) 28 / 100 Proliferation Index - PPI Tier 2 Organised Crime Index* Corruption Perceptions Index* (137/198) Threat Moderate Threat Level

OC Index 6.05/10 TI & Afrobarometer 46% Proliferation Index - PPI 295/ 1300 Criminality* Citizens Views and Experiences of Corruption Overall Rate Controls* Controls score Report

OC Index 6.75/10 TRACE 58 Global Terrorism Index 3.957/10 Criminal Actors Bribery Risk Matrix (130/200) GTI - Impact* “Low” Impact

OC Index 7.5/10 Global Slavery Index 7.6/1,000 US Dept of State Included State Embedded Actors GSI Incidence* Incidence of human trafficking Country Reports on Terrorism*

OC Index 6.5/10 Global Slavery Index 304,000 Global CyberSecurity Index 0.621/10 Criminal Networks No of estimated Modern Day Slaves Estimated numbers of modern day 2018 (65/175) slaves

OC Index 7.5/10 Global Slavery Index “B” Rating Mo Ibrahim Governance Index 55/100 Foreign Actors Country Response Rating* (Ratings: AAA, AA, A etc) (49.9 - All Africa)* (Increasing improvement) (20/54)

OC Index 5.5/10 US Dept of Labor 3,014,126 - 30.9% of children aged Freedom House 34/100 Mafia Style Gangs Child Labour between 5 -14 working Freedom Index* “not free”

OC Index Cannabis 7/10 & Heroin 5.0/10 & US Dept of State Tier 2 Watchlist Rated Heritage Foundation 59.5/100 Drugs Trafficking Synthetic’s 4.5/10 & Cocaine 3/10 Trafficking in Persons* (2020) Economic Freedom Index “Mostly unfree”

OC Index 5/10 IOM Migration I -1.7million/E - 735,000 Basel AML Index * 7.95/10 Arms Trafficking E - Emigration / I - Immigration (2017 - 10/146 Countries)

OC Index 4/10 Illegal Unreported and Unregulated N/A FIU Egmont Yes People Smuggling (IUU) - IUU Fishing Index Member

OC Index 4.5/10 EU Listing of Countries for Illegal No Interpol Yes Human Trafficking Fishing Member

OC Index 7/10 US DoS - Wildlife Trafficking Focus Asset Confiscations No Illegal Timber Focus / Countries of Concern* over 1% of Proceeds*

OC Index 6.5/10 Environment Performance Index 44.28/100 Country National Risk Assessment* Yes Illegal Wildlife 145/180

OC Index 7/10 EUIPO & OECD Counterfeit Goods 0.035 Financial Information Sharing No Illegal Mining Propensity of Exports (2016) Partnership

OC Index 3.63/10 Tax Justice Network Not Included US Dept of State No Resilience* Financial Secrecy Index INCSR Vol I & Vol II*

OC Index 3/10 EU List of None Co operative Co operative European Union List* Yes AML Jurisdictions for Tax purposes

OC Index 3/10 Largely Compliant FATF Standards 50/100 OECD - Global Forum Law Enforcement on Transparency & Exchange Info for Tax Purposes 40 Recommendations*

OC Index 4.5/10 Global Financial Integrity US$228million - 19.75% (2017) FATF Standards 0/100 International Co- operation Illicit Financial Flows* 11 IO’s on Effectiveness*

OC Index 3.5/10 Embassy’s from N Korea, Syria, Iran Yes - Iran FATF Standards 33/100 Economic Regulatory Environment or Cuba Core 10 Recommendations

Illegal Drug Dependency / Disorders 184,793/0.54% Embargoes - Country Sanctions None FATF Standards 0/100 Number/Share (Comprehensive - UN, US, EU, UK) Core 4 IO’s on Effectiveness

Numbeo Crime Survey 2020 59/100 OFAC Listed Parties 7 FATF Yes (24/129) with Local Addresses Counter - Measures (Strategic Deficiencies) Strategic Deficiencies List*

* Symbol Indicates the information is included in the FCN Country Index

Uganda - Threat Assessment - 2020 Page 5 of 41 Section 4 Continued - Country Threats Heat Map

There are many threats that effect Uganda, which are in most part targeted towards its resources, be they its natural resources, the people, its forests, metals, minerals, and wildlife. The effect of endemic corruption increases the threats and reduces the ability to effectively respond. For more details in summary form see the figure below.

Uganda - Threat Assessment - 2020 Page 6 of 41 Section 5 - Key Threats in Detail

In this Section 5, the most important criminal “The NRA indicates that the overall threat of markets, are assessed and summarised based terrorist financing is Medium High, as a on available sources. combination of the external threat, which 5.1 National Risk Assessment (NRA): carries a higher risk rating (High) versus the Uganda published its AML/CFT NRA in 20177. internal threat, which is lower (Medium)”. The NRA states that “the analysis of the ML threat showed that, at domestic level, the most For more details on specific threats see proceeds-generating predicate offences are separate sections on drug trafficking, corruption, fraud, tax crimes, and counterfeiting corruption, environmental crimes and tax of goods”. These crimes pose a “high” money evasion see below. laundering (ML) threat to Uganda. 5.2 US INCSR: Uganda is not listed in Volume 1 or in Volume 2 as one of 80 countries TI - Corruption Perceptions Index (Scores out of 100) - � (Scores out of 10 - higher scores are better) categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial

29.0 28.0 26.0 25.0 26.0 Crimes in its 2019 Report.

Uganda not listed 2012 2014 2016 2018 2019 US INCSR 2019

“At external/trans-national level – that is the 5.3 Corruption: Corruption is not only a predicate offences committed outside Uganda significant generator of illicit funds, but also an and the proceeds laundered in or through enabler of other serious crimes which protects Uganda – the most proceeds-generating those involved from investigation, prosecution predicate offences are smuggling, wildlife and/or conviction. offences, drug trafficking and human trafficking. Smuggling of gold and timber, and, Although the NRA identified corruption as one to a lesser degree, of diamonds, are a of the the offences that generates the most significant source of proceeds”. proceeds at a domestic level, the NRA observes that the reporting and detection of “Uganda’s vulnerability to ML remains, overall, this crime lags behind fraud and tax crimes. high. The major factors behind it are the The NRA explains that “in many instances country’s low ML combating ability and the very corruption (such as the paying of a bribe to high overall sectoral ML vulnerability”. access services) is considered as a “way of life” in Uganda and therefore often goes without High Risk (Net) National Risk Assessment 2017 being reported”. Corruption is considered to Uganda - Threat Assessment - 2020 Page 7 of 41 pose a “high” money laundering threat in capacity to control the extent of its territory or Uganda, and that “embezzlement and all the rungs of its bureaucracy”. diversion of government funds are the main According to PWC’s Global Economic Crime & proceeds generating crimes with regard to Fraud Survey: Uganda Report, 201812, the corruption. Funds are embezzled or diverted to incidence rate for Bribery and Corruption in the personal interests of the offenders through Uganda is 29%, against a 30% incident rate in outright theft, misallocation, diversion to a East Africa, 32% in all of Africa, and 25% wrongful purpose of interest to the offender globally. and other conducts.” The NRA estimated that corruption generated UGX 100 Bn (US$27 46% of Ugandans using public services million) annually. paid a bribe TI GCB 2019 According to the African Union8, “In addition to posing a high money laundering threat to

Uganda, corruption, according to the TI & Afrobarometer Findings 2019 (% Survey) - � Inspectorate of Government (IG) report (2014), (Scores out of 10 - lower scores are better) estimated that the amounts paid in bribes in 2013 was about UGX 165 billion (USD 49.6 78.0 million)”. 69.0 70.0 46.0 Uganda described as a Fragile State ”Increasing” ”Doing Badly” ”Paid Bribe” ”Most Corrupt - Police” Trace Bribery Matrix 2019 According to TI’s 2019 International's Global The 2019 Transparency International (TI) Corruption Barometer (GCB) survey of People Corruption Perceptions Index (CPI) ranks and Corruption: Citizen's Voices from Around Uganda as 137th out of 198 countries, with a the World13, 46% of Ugandans using public score of 28 out of 1009. This is a marginal services paid a bribe in the previous 12 improvement from the score of 26/100 in months. 201810. Scores are from zero (highly corrupt) to 100 (very clean). • Overall bribery rate is 46% up from 38% in 2015. The 2019 TRACE Bribery Risk Matrix11 rates Uganda at a “medium” risk level, ranking it • 69% of Ugandans surveyed think corruption 130 out of 200 surveyed countries, with an increased in the previous 12 months & 78% overall risk score of 58. The TRACE Matrix think their government is doing a bad job of equates Uganda along with countries such as tackling corruption Ivory Coast, The Gambia, and Kyrgyz Republic • Overall, the police service is considered the as a “Fragile State”, which is “typified by a most corrupt institution, with 70% of people fragile central government that lacks the

Uganda - Threat Assessment - 2020 Page 8 of 41 believing that most, or all police are corrupt, wide range of sectors and government with 49% of the respondents using police institutions, including procurement, police, and services reported having paid a bribe to the the defence, education and health sectors. As police. an aid dependent country, Uganda needs a sound public financial management system, to • Ugandans also think that Government ensure donors’ funds are spent wisely and Officials (50%), Judges and Magistrates leakages are avoided. In spite of reforms, there (43%), Business Executives and Members of is still room to improve the level of Parliament (40%), followed by Local transparency and accountability of the Government (38%), the President / Prime country’s public financial management system Minister (37%), NGOs (21%), Traditional still. The Ugandan government has Leaders (11%) and Religious leaders (8%) are acknowledged that corruption is one of the corrupt. Some scores indicate a deterioration main challenges facing the country. But recent from scores reported in 2015 for Police developments have raise questions on the (63%), the President / Prime Minister (29%), government’s political will to address it. Several and Members of Parliament (36%). reforms, laws and new institutions to fight According to the report14, more than three- corruption have been established. However, in quarters of the citizens in Uganda are spite of recent investigations and corruption particularly concerned about and fear trials, an effective enforcement of the laws in retaliation for reporting corruption. place is still lacking”.

In their 2019 Report, Overview of Corruption According to the African Union16, “The and Anti- Corruption in Uganda15, TI in incidence of corruption is endemic and Uganda reported that, “ widespread in Uganda. Defining corruption as is widespread and seen as one of the greatest “the misuse of public power for private gain”, obstacles to the country’s economic the main causes are societal attitudes, political development as well as to the provision of greed, weak institutions, weak and faulty accounting systems, low remuneration and quality public services. Corruption-related poor employment benefits in the public sector. challenges in the country stem from a weak Corruption manifests itself in various ways, separation between the public and private including the abuse of office, bribery, extortion, spheres, leading to extensive clientelistic , favouritism, fraud, embezzlement, practices and , as well as widespread misappropriation of public funds and assets, . Such corruption challenges and use of public resources or assets for are exacerbated by weak law enforcement, personal gains. which fuels a culture of impunity, particularly with regards to high-ranking officials involved The African Union reports that the challenges in corruption schemes. Corruption affects a Uganda face are:

Uganda - Threat Assessment - 2020 Page 9 of 41 • A lack of commitment on the part of the with almost all exerting at least moderate government to implement influence. Environmental markets are the most recommendations of various anti- significant”. The highest criminal markets were corruption agencies and commissions of cannabis trade, illegal mining, and illegal enquiries; logging (all 7/10), followed by wildlife trafficking (6.5/10), arms trafficking, heroin • An inadequate financial, human, trade (5.0/10), human trafficking, synthetics technological and logistical capacities in drugs trade (4.5/10), human smuggling various agencies charged with the (4.0/10), & the cocaine trade (3.0/10). responsibility of fighting corruption;

OC Index Criminal Markets - Importance - � • An inherent weaknesses in the public (Scores out of 10 - lower scores are better) procurement system;

• Weak information management systems 6.5 7.0 7.0 7.0 5.0 without a coordinated tracking and 4.5 4.5 4.0 information- sharing mechanism; and Synthetics Wildlife HT Mining Logging Arms Cannabis People Smugg

• Public attitudes that tolerate and elevate ENACT’s 2020 report on The Political corruption. Economy of Heroin Markets in East and Southern Africa17, highlights the the 5.4 Organised Crime: According to the impact of porous borders and entry Organised Crime (OC) Index 2019 , Uganda is points that contribute to organised rated as High Criminality and Low crime. “Over the last two decades, Resilience, alongside other Sub-Saharan Entebbe Airport has become a prime site countries such as Cameroon, Central African of major drug and wildlife commodity Republic, Ivory Coast, DRC, Guinea, seizures, highlighting Uganda’s role as an Madagascar, ! Sierra Leone, entrepôt hub which is able to leverage its South Sudan, Togo and Zimbabwe. central interior location and facilitate the fast and smooth passage of goods across High Criminality - Low Resilience the continent. Kampala and Entebbe have Africa’s OC Index 2019 become prime sites for traffickers to set In terms of criminality, the OC Index ranks up operational bases from where they Uganda 12th/54 African countries, and 5th recruit couriers and set up fronts for their among 9 of its East African neighbours, with an criminal businesses. Over time, the overall score of 6.05/10 capital has also developed its own small drug market”. According to the African OC Index, criminal markets do not have a severe influence on The OC Index states that the “analysis of society, however “criminal markets are diverse, Uganda’s criminal actors suggests that criminal

Uganda - Threat Assessment - 2020 Page 10 of 41 Uganda - Threat Assessment - 2020 Page 11 of 41 networks, foreign actors and state-embedded to be shipped from Entebbe airport, relying on actors all play active roles in illicit trade flows. the weaker controls usually devoted to They are involved in multiple facets of transiting shipments”. organised crime, from arms smuggling to drug “The illegal transit of wildlife is facilitated by a trafficking and other illicit contraband”. Actor number of factors among which include: an types in Uganda are “Foreign Actors” (7.5/10), intrinsic weakness of the current legislation in “State Embedded Actors” (7.5/10), “Criminal force, the presence of powerful and highly Networks” (6.5/10), and “Mafia Style organised criminal networks with national and Groups” (5.5/10). transnational hubs, loopholes of law

OC Index - Criminal Actor Types - Importance - � enforcement in the trade chain, corruption, (Scores out of 10 - lower scores are better) weak capacity, and a growing demand from east and southeast Asian markets”.

7.5 7.5 ENACT reported in 2018 that the the Greater 6.5 5.5 Virunga Transboundary Collaboration (GVTC) was established through a treaty signed by Criminal Networks State Embedded Foreign Actors Mafia Style Uganda, DRC and Rwanda in September 2015. According to the World Economic Forum’s “It has since evolved to become a broader Organised Crime Index 201918, Uganda is mechanism for strategic and collaborative ranked 118/140 scoring 42.2/100. The index management between the Congolese Institute identifies whether and to what extent for the Conservation of Nature, the Rwandan organised crime impose costs on businesses Development Board and the Ugandan Wildlife (with higher scores = better scores). Authority. So far, the GVTC’s collective law enforcement efforts have yielded positive 5.5.1 Environmental “Green” Crimes: Illegal results in combating poaching and wildlife Wildlife Crimes: According to a 2018 Uganda crime. Encouragingly, the number of mountain Wildlife Trafficking Assessment19 from gorillas and elephants has grown in the past TRAFFIC, “The species sourced from the decade. In addition to anti-poaching activities, country for the international illegal trade are the GVTC also promotes community pangolins, elephants in very limited numbers, participation through co-ordinated and some chameleon and other reptile species conservation and protection campaigns”. that could enter the illegal market taking advantage of a parallel legal trade channel”. Collective law enforcement efforts have yielded positive results in combating “The major concerns for Uganda are the poaching and wildlife crime evidence of a strong role as transit hub for ENACT 2018 wildlife trafficking (mainly ivory) from western and central Africa or from Kenya and Tanzania

Uganda - Threat Assessment - 2020 Page 12 of 41 Uganda has been identified in the US END estimates that 80,000 hectares of the country’s Wildlife Trafficking Report20 2019 as a “Focus” forests are cleared to make charcoal every country in respect of wildlife trafficking. year23.

Notwithstanding the efforts being made by In 2018, the National Executive Director of Uganda,“Uganda occupies a strategic position Ugandas the NFA said in a statement24 that as a transit hub for wildlife and products such “Forest loss has been driven by illegal logging as ivory, pangolins and rhino horns. Experts to meet huge demands for timber, fuelwood deem the illicit fauna market to have a including charcoal, carving, unsustainable significant negative impact”, according to the agricultural practices, urbanisation and 2019 OC Index. unregulated livestock grazing”.

Uganda a transit hub for wildlife and A media report25 in 2019 relayed that a products OC Index 2019 supervisor in the NFA, local police and army officers were being investigated in relation to According to the NRA, “Uganda is estimated to illegal logging allegations. lose about UGX 2,000,000,000 (US$588,235,000) annually in wildlife 80,000 hectares of Uganda’s forests are offences ranging from commercial poaching to cleared to make charcoal every year hunting for daily subsistence”. National Forest Authority

5.5.2 Environmental “Green” Crimes: Illegal According to the 2019 OC Index, “illegal Logging: Uganda has reportedly lost 63% of logging is highlighted as a major concern, its forest cover in the past 25 years due to tree- constituting around 30% to 40% of total timber cutting for firewood, timber and charcoal, as production in Uganda. The smuggling of well as the growth of farms and towns, timber is often combined with illicit trade in according to the National Forest Authority other commodities, such as gold and ivory”. (NFA)21. This amounted to forest cover loss of 1.33 million hectares22. In 2019, 55% of 5.5.3 Environmental “Green” Crimes: Illegal Uganda’s forests grew on protected land and Mining: A report from Global Witness, 45% on private land, contrasting the situation Uganda: Undermined26 in 2017, raised in 1990 where 70% grew on private land, and concerns relating to corruption, 30% in protected areas. mismanagement and political influence that could impact investment in the Ugandan Charcoal and firewood are used by an mining sector. The investigation findings estimated 90% of Ugandans for cooking. include the prevalence of endemic corruption, Charcoal is made by heating wood until it is hazardous conditions for workers due to lack transformed into a lightweight, high-carbon of regulation, knock-on impact to wildlife and material that resembles coal. Uganda’s NFA

Uganda - Threat Assessment - 2020 Page 13 of 41 ecosystems, loss of tax revenue for the 5.5.4 Environmental “Green” Crimes: Illegal government, and the potential of Uganda Sand Mining: The Institute for Security Studies being a transit point for minerals from (ISS) has reported29 that criminal countries identified to use this to fund entrepreneurs have formed networks in conflicts. The report describes a “shadow Uganda to sell illegally mined shipments of system” that benefits “investors and politically sand “using an established regional and global powerful Ugandans” including lawyers, black market”. According to the ISS, gaps in members of parliament and foreign-backed laws, poor regulation /oversight, collusion with investors. In June 2020, a mining media PEPs, and demand for infrastructure projects article27 reported that the recently appointed has led to destabilisation of the ecology and State Minister for Minerals was receiving affected livelihoods (fishing and agriculture) “death threats from anonymous people whom around Lake Victoria. Although there are she described as “mafias promoting illegal employment opportunities within the industry, gold mining”, and support was requested for there is evidence of exploitation by exposing the Minister in her efforts to combat illegal miners to long working hours in dangerous mining activities and achieve progress with the conditions, as well as the use of child labour. cleaning up of Uganda’s mining sector. China is identified as one of top recipients of the illegally mined sand. ISS reports that the The problem appears to be raising concern in lack of accurate export data makes it difficult to relation to the Artisanal and Small Scale Gold track illicit flows of funds which may take place Mining (ASGM) sector. The US Department of on the black market. “Data on Uganda’s sand Labour28 reported that “According to exports is not reliable. For example in 2015 the international organisations and the media, country exported 22 tonnes, earning UGX253 thousands of children abandon school to work million (US$68,500), but exported 19 tonnes in ASGM. One research study found in 2016, earning only UGX16 million approximately 1,000 children working in gold (US$4,300). Information is also lacking on mines in central Uganda. Boys work in registered sand miners in Uganda, as well as dangerous conditions in the mines, collecting the regional or global sand companies that soil from deep, open pits. Children mine gold trade with the country”. in riverbeds, use toxic mercury to process gold ore, and carry water from long distances to sift The US Department of Labour30 in 2018 and wash sediment”. reported that “There are reports that school- aged children harvest sand in Uganda, According to the 2019 OC Index, “the export particularly in the Central, Eastern, and of illegal gold is reported as a key issue and Northeastern regions of the country. According has grown significantly since around 2016”. to a Government of Uganda official, sand harvesting is one of the main occupations in

Uganda - Threat Assessment - 2020 Page 14 of 41 which child labourers work. Children harvest According to ENACT32, in 2017 several sand for long hours, which prevents them from Ugandan police officers were implicated in attending school. Children dive underwater, working with organised crime groups where scoop up sand, and transport it to boats on the they were allegedly selling drugs recovered river bank. This work exposes children to severe from suspects, tampering with narcotics health and safety hazards, including drowning, exhibits, and theft from police stores. A senior injury, and water-borne disease”. group of officers were also allegedly involved in smuggling narcotics in and out of Uganda at OC Index - Drug Trafficking - Importance - � (Scores out of 10 - lower scores are better) Entebbe Airport.

According to Interpol’s 2018 Overview of Serious and Organised Crime in East Africa 7.0 33 4.5 5.0 report “In May 2017, authorities found a 3.0 clandestine methamphetamine laboratory in

Cocaine Synthetics Cannabis Heroin Uganda, following the arrest of two Ugandan nationals in Kenya”, and “Uganda seized several 5.6 Drug Trafficking: The OC Index 2019 kilograms of khat, including, in one case, 32 kg reports that “drugs markets in Uganda are of khat at Entebbe International Airport in particularly prevalent, with cannabis the most 2017” . widespread drug. High levels of cannabis production make it easy to access, resulting in The US 2020 OSAC report34 also states that high levels of domestic consumption. Uganda “Uganda is strategically located along a major is also a transit country for cannabis destined narcotics transit route between Middle Eastern, for southern and western African markets, Asian, and West African heroin markets. Drugs resulting in a high score of 7/10. Local cocaine routinely transit Uganda headed for markets in and heroin use is reported to be growing, Europe, the United States, and other African though domestic consumption of both is on a countries. Cannabis grows throughout Uganda smaller scale than cannabis. Ugandan ports and is rarely policed, allowing large crops to reportedly serve as transit points for cocaine flourish in remote areas”. and heroin as well as for synthetic drugs, though experts judge local consumption of According to the NRA, who rate the drug these as negligible”. trafficking threat as “Medium High", the assessment appears aligned with other views Drug markets in Uganda are highlighted above, stating that “the 2014 particularly prevalent Annual Crime and Road Safety Report indicates OC Index 2019 that Uganda is primarily a transit country for Uganda has an estimated 184,793 people31 narcotics and psychotropic substances with illegal drug use disorders (2017), especially cocaine and heroin. The report representing 0.54% of the population.

Uganda - Threat Assessment - 2020 Page 15 of 41 indicates that these substances originate Uganda abroad. Ugandan children as young as mainly from eastern Asian countries and are 7 years old are exploited in forced labor in transited through Uganda to other Africa agriculture, fishing, forestry, cattle herding, countries, Europe and America. Within Uganda, mining, stone quarrying, brick making, cannabis is commonly grown and consumed in carpentry, steel manufacturing, street vending, various parts of the country. As early as 2009, bars, restaurants, gold mining, and domestic reports indicated that cannabis and heroin service. Traffickers exploit girls and boys in were being trafficked through Entebbe commercial sex. Recruiters target girls and International Airport. Africa is a major source of women aged 13-24 for domestic sex trafficking, cannabis seized in Europe and Uganda in especially near sports tournaments and road particular is a major producer”. construction projects. An international organisation estimates there are between 5.7 Modern Slavery: According to the 2018 7,000 to 12,000 children exploited in sex GSI Index35, Uganda is ranked 16/51 African trafficking in Uganda. An international countries, with 304,000 modern day slaves, organisation and NGO reported that most and an incidence of 7.6/1000 people with a internal trafficking victims are Ugandans, many “B” Government response36. of whom are from the northeastern region, According to the OC Index 2019, “Human specifically Karamojong children whom trafficking is deemed to be of concern, as traffickers exploit in forced begging and Uganda serves as an origin, transit and commercial sex in brothels. In February 2020, destination country for victims subjected to the government and civil society reported forced labour and sex trafficking. Similarly, children from Karamoja were sold at markets in human smuggling is rife and many criminal the eastern region for 20,000-50,000 UGX networks are based in Uganda.” ($5.46- $13.70); traffickers exploited them in forced labor as beggars, domestic workers, and Ugandan children as young as 7 years old are in commercial sex. An NGO reported local exploited in forced labor in agriculture, fishing, forestry, cattle herding, mining, stone authorities’ intervention to remove internally quarrying, brick making, carpentry, steel trafficked children from the streets caused manufacturing, street vending, bars, children to move to work as vendors in markets restaurants, gold mining, and domestic service where they are vulnerable to exploitation. OC Index 2020 The 2020 US Trafficking in Persons (TIP) Researchers reported there are approximately report37 downgraded Uganda from a Tier 2 3,800 children living on the streets of Kampala country in 2019 to a Tier 2 Watchlist country. and three other major towns and an additional The Report states that, “human traffickers 11,700 children working on the streets but exploit domestic and foreign victims in sleeping elsewhere. Reportedly, traffickers, Uganda, and traffickers exploit victims from called “elders,” force some street children to beg and exploit the girls in commercial sex.

Uganda - Threat Assessment - 2020 Page 16 of 41 The “elders” are a well organised network of subject Ugandans to forced labor and sex traffickers and NGOs have alleged complicit trafficking in UAE, Saudi Arabia, Oman, Qatar, officials allow the practice to continue. A local Kuwait, Iraq, Iran, Egypt, Turkey, Algeria, organisation reported parents in the Acholi Malaysia, Thailand, Bahrain, Jordan, China, and subregion in northern Uganda, who failed to Kenya; India has increasingly become a pay their debts were required to have their destination for sex trafficking. In 2019, media children work on farms until the debt was paid. reported traffickers sold girls from markets in In 2018, an NGO alleged that traffickers Katakwi district and transported the girls to recruited children from Napak district, Nairobi where they were exploited as domestic northeastern Uganda, and then sold them as workers; some of the girls worked for Somali domestic workers for 20,000 UGX ($5.46). immigrants in Nairobi and were further Media reported that some parents sell their transported to Somalia where they were children to middlemen who resell the children exploited by al-Shabaab terrorist group. In for approximately 30,000 UGX (US$8.20). In 2018, media and government officials alleged 2018, an international organisation reported Ugandan girls were being sold in a “slave separating four Ugandan children from armed market” in the UAE. Extremely high recruitment groups in the DRC. Authorities subjected some fees sometimes led to situations of debt prisoners in pre-trial detention to forced labor. bondage. To circumvent the government ban on migrant work in Oman, some licensed and Traffickers compel some children from the DRC, unlicensed agencies send Ugandans through Rwanda, Burundi, Kenya, Tanzania, and South Kenya and Tanzania. Official complicity may Sudan into forced agricultural labor and sex have hindered government oversight of labor trafficking in Uganda. In 2017, individuals from recruitment agencies. COPTIP reported that Rwanda and Somalia, including a Somali traffickers appear to be increasingly organised refugee from Nakivale Refugee Settlement, and some may have formed regional trafficking were victims of internal trafficking. South networks. The government and an NGO Sudanese children in refugee settlements in reported an increase in victims with university northern Uganda are at risk of trafficking. In degrees as traffickers target graduates with the 2018, there were several media reports of promise of skilled jobs abroad. The alleged complicity of police officers in the sex government and NGOs reported cases trafficking of child and female refugees. involving victims that were recruited by Young women remained the most at risk for licensed companies in which victims paid high transnational trafficking, usually seeking administrative fees based on promised high- employment as domestic workers in the Middle paid jobs abroad; however, upon arrival, they East; at times traffickers fraudulently recruited found themselves locked into contracts in low- Ugandan women for employment and then paid domestic work. NGOs reported that exploited them in sex trafficking. Traffickers traffickers are frequently relatives or friends of Uganda - Threat Assessment - 2020 Page 17 of 41 victims, or may pose as wealthy women or illegal gun ownership have led to high rates of labor recruiters promising vulnerable gun violence”, however it was concluded that Ugandans, frequently from rural areas, well- this had “only a moderate influence on paid jobs abroad or in Uganda’s metropolitan society”. areas. Reportedly, pastors, imams, and local Uganda implicated in re-exporting leaders at churches and mosques in Uganda weapons, ammunition, and aircraft to have also assisted in the recruitment of South Sudan domestic workers abroad, mostly for Middle CAR 2019 Eastern countries; these leaders encourage A 2018 report38 by Conflict Armament female domestic workers to take these jobs and Research (CAR) “draws on evidence from CAR’s in turn receive a fee per worker from recruiters. field documentation to assess allegations of Some traffickers threatened to harm the victims’ arms supplies to the conflict’s parties from family or confiscated travel documents.” China, Egypt, Ethiopia, Israel, and Sudan”. The In 2018, The US Department of Labour advised report found that “the retransfer to South that the list of goods produced by child labor Sudan of weapons, ammunition, military or forced labor comprises 148 goods from 76 aircraft, and other licensable items that EU and countries. In Uganda, these goods/products US companies have exported to South Sudan’s are cattle, stones, fish, tobacco, bricks, sand, neighbours—particularly Uganda-may coffee, tea, rice, charcoal, sugarcane, gold and contravene non-retransfer clauses contained vanilla. within end-user agreements with original exporters”. The study presented cases of The Uganda NRA rates the human trafficking several retransfers where “elements within threat as “medium”, “data on human those governments are actively involved in trafficking indicates that Uganda is both a diverting weapons and ammunition to source and a destination country for trafficked unauthorised end users”. Additionally, the persons. Uganda was noted to be a destination report highlights that “a network of US and for trafficking victims from Somalia, Rwanda, Ugandan companies— controlled by British, Burundi, South Sudan and Tanzania. Uganda Israeli, Ugandan, and US nationals—procured a was also noted to be a source country for military jet from the United States and an victims trafficked to South Africa, Kuwait, DRC, Austrian-made surveillance aircraft” for the Malaysia, India, UAE, Iraq, China and Saudi Sudan People’s Liberation Army (SPLA) in Arabia among others”. 2015/6. 5.8 Arms Trafficking: The 2019 OC Index experts expressed “concern over arms 5.9 Goods Piracy: According to the Trends in trafficking, with arms produced in and Trade & Pirated Goods Report 201939 by the smuggled out of Uganda. Substantial levels of EUIPO & OECD, 3.3% of world trade in 2016

Uganda - Threat Assessment - 2020 Page 18 of 41 was made up from trade in counterfeit goods. false declaration) appears to generate Uganda is estimated as having a low significant amounts of proceeds crime. propensity to export counterfeit products with Uganda Revenue Authority a score of 0.035/1 (2016) with export trade to implemented series of anti-smuggling the rest of the world & for export trade with the measures in 2013/14 EU at 0.000/1. African Union Notwithstanding the view above, the NRA assesses counterfeiting as posing a “medium” The Ugandan Revenue Authority (URA), threat in Uganda. “The intellectual property “implemented a series of anti-smuggling aspect of counterfeiting is not criminalised at measures to curb tax evasion and avoidance, the moment in Uganda; the sanctions for especially on imported goods entering and production of or trading in substandard traded in the country. Examples of such counterfeits are not deterrent enough and the measures include: a 24-hour border patrol (by confiscation and destruction of goods is rarely a paramilitary unit operated by the URA) at the done, all of which hinder the efficacy of main border points of Busia, Malaba, Katuna policing counterfeiting goods”. and Entebbe International Airport, and the implementation of a Revenue Authority Digital “Commonly counterfeited products in Uganda Data Exchange (RADDEX) system to provide include cosmetics, tyres and vehicle spare cargo details in a standardised electronic parts, electronics, wines and spirits, foods and format – minimising data errors and saving beverages among others” time. The anti-smuggling measures are partially According US 2020 OSAC report40, “Though credited with a reduction in tax evasion. The the sale and purchase of counterfeit goods is increase in international trade taxes from UGX illegal under Ugandan law, intellectual property 1 trillion in 2004/05 to UGX 3.6 trillion in theft is pervasive, and counterfeit and pirated 2013/14 was as a result of the anti-smuggling goods (especially digital media) are widely measures”, according to the African Union41. available for sale”. The United Kingdom (UK) is, according to the 5.10 Theft /Stolen Goods and Smuggling: NRA, a major source for stolen luxury cars sold The NRA states that “smuggling of gold and in Uganda. In 2015, stolen luxury cars from the timber, and, to a lesser degree, of diamonds, UK worth approximately US$2 million were are a significant source of proceeds. Most of found in Uganda. The routes discovered were the gold is smuggled from Eastern DRC and through France, Oman, and Kenya to Uganda Central African Republic, through Uganda and South Sudan. other countries, to UAE, India, Lebanon and Media reports in the last few years indicate that South Sudan”. The NRA also notes that mis- Uganda is grappling with smuggling of invoicing (either through under declarations or

Uganda - Threat Assessment - 2020 Page 19 of 41 humans, ivory, pangolin scales42, drugs43, exploits the governance and control gold44. weaknesses of the organisation to commit fraud. The results of the survey showed that this Enforcement interventions led to 9,152 crime had a 45% incidence rate in Uganda. It seizures was followed by business misconduct and Uganda Revenue Authority 2019 asset misappropriation. Fraud committed by According to the Uganda Revenue Authority’s the consumer was especially prevalent in the (URA) Annual Press Brief for the period July financial services industry where it had an 2018 to June 201945, “enforcement incidence rate of 57%”. interventions led to 9,152 seizures of which 8,000 were for dutiable goods and 1,152 were Ugandan organisations reported a 66% for non-dutiable goods. This yielded revenue incidence rate of having experienced at worth UGX 78.48 billion (US$21 million) . least one form of economic crime over the last 24 months, which is 35% higher Recoveries were majorly as a result of offences than the global average like; outright smuggling, undervaluation, mis - PWC 2018 declaration /mis-description and false documentation. The top most risky items “Against the global average of 19%, 24% of included: electrical cables, rice, neutral spirit, Uganda’s respondents who reported having garments, chewing gum, textiles, wines, experienced economic crime indicated that footwear, motor vehicles and motor cycle they suffered a direct loss of between spares motor vehicles, foot wear, hardware US$100,000 & US$1 million to the most items, rice, wheat flour, motor vehicle tyres, disruptive crime they experienced in the past textiles and kitchen ware, garments, printed 24 months of operations. circuit processing equipment”. Further, 74% of the survey respondents 5.11 Financial Fraud: The PWC 2018 Global indicated that they lost at least US$25,000 to Economic Crime and Fraud Survey for the most disruptive crime they experienced in Uganda46 reports that “Ugandan organisations the past 24 months of operations compared to reported a 66% incidence rate of having 63% of respondents who indicated they lost experienced at least one form of economic the same amount globally. crime over the last 24 months, which is 35% Instructively, 2% of the respondents in Uganda higher than the global average. Fraud indicated they lost more than US$5 million to committed by the consumer was the most the most disruptive crime showing just how prevalent economic crime in Uganda. This costly economic crime can be”. economic crime classification relates to fraud where a consumer in the course of undertaking According US 2020 OSAC report47, “Financial a legitimate transaction with an organisation, crime is common in Uganda. Wire transfer,

Uganda - Threat Assessment - 2020 Page 20 of 41 check, and credit card fraud are widespread. and communication, financial and insurance, ATMs are often compromised, and advance fee real estate, public administration and human fraud is perpetrated via email”. health sectors” make up most of the gap. “Audit and compliance activities managed to “The counterfeiting of U.S. dollars is common; recover Ug.Shs 130.37 billion”. the frequency of this type of crime has increased in recent years. In 2016, Ugandan 5.13.1 Emerging Threats: Cybercrime: authorities discovered large quantities of high- According to the 2018 Global Cybersecurity quality counterfeit US$100 bills in Kampala and Index (GCI)49, Uganda scored 0.621/10 and is other tourist destinations throughout the described as having a “High” level of country. In 2018, there appeared to be a further commitment rated 65th globally out of 175, uptick in incidents involving counterfeit and 7th out of 44 in Africa in terms of currency. The Embassy fielded increased cybersecurity. reports of counterfeit bills; authorities Uganda lost USD$ 42 million to cyber arrested three individuals in possession of criminals in 2017 approximately US$1 million in counterfeit US Institute for Forensics and ICT Security currency at a major hotel in Kampala. In 2019, Kenyan authorities arrested 2 The Institute of Forensics and ICT Security50, Ugandans in Kenya with a reports that “Cybercrime in Uganda has been substantial number of counterfeit 100- mainly happening through email and website dollar bills” scams in which people are swindled huge amounts of money to buy non-existent 5.12 Tax Evasion: The NRA rates “tax crimes” products or in promise of some future returns”. as “high risk” (being the second highest The Uganda Police Force has established a proceeds generating crime). Tax crimes for the Cyber Crimes Unit charged with the 2015/16 year include outright smuggling (UGX responsibility of mitigating cybercrime in the 4770Bn), under valuation (UGX 11710 Bn), country. other offences (UGX 5500 Bn), concealment (UGX 0.837 Bn) with 5646 seizures (UGX Notwithstanding this, in 2017, “cybersecurity 37620 Bn). researchers revealed that Uganda lost close to UGX15 billion (US$40.5 million) to cyber The 2019 Economic Policy Research Centre criminals in 2017 alone. In the period under reported48 that Uganda, “compares poorly to review, 95.6% of cyber security incidents went other low-income countries with regard to unreported or unresolved and only 4.4% of the income tax revenue mobilisation. The reported cases were followed through to a 2015/2016 gross tax gap was estimated at successful prosecution”. Ug.Shs 1, 783.31 billion”, of which the “manufacturing, wholesale, retail, information

Uganda - Threat Assessment - 2020 Page 21 of 41 “The Uganda Cyber Security Report also According to the Numbeo 2020 Crime Index, revealed that 90% of Ugandan organisations Uganda is internationally ranked 24/129 with a operate below the cyber security ‘poverty line’. score of 59.00/10056. For an organisation to have in place a 5.15 FCN Overall Country Threat Ratings: semblance of cyber defence they will have to incur costs of UGX. 5,550,000 (US$1500) to Uganda is rated the 34/40 in SSA and 8/10 in invest in monitoring, detection and prevention East Africa, for threats with an overall “High” tools”. Threats score of 30/100.

According to the US 2020 OSAC report51, “Cybersecurity continues to be a challenge in Uganda. The Ugandan government does not prioritise funding for cybersecurity infrastructure, and does not allocate sufficient funds to pay for solutions, even after identifying security breaches in sensitive government and financial systems”.

5.13.2 Emerging Threats: Kidnapping: Media articles have highlighted a number of instances of kidnapping incidences in Uganda in the last few years, including a high profile kidnapping of an American tourist in a game park52, the abduction of businessmen53, and 42 abduction cases in 4 months54 in 2018/9. It appears that the kidnappings are for ransom, but paying the ransom does not always guarantee the safety of the abducted person/s.

5.14 Other Crimes: According to UNODC55 homicide rates in Uganda for 2017 were 11 per 100,000 people, with Uganda ranked 18/97 countries, and robbery rates were 17 per 100,000 people, and ranked 53/79 countries and imprisonment rates were 126 per 100,000 people, and ranked 82/138 countries (with 1 being the highest).

Uganda - Threat Assessment - 2020 Page 22 of 41 Uganda - Threat Assessment - 2020 Page 23 of 41 Section 6 - Sanctions & Terrorism

In this Section 6, the focus is on sanctions and Park Geun-hye and Ugandan President terrorism threats. Yuweri Museveni, Uganda announced it was “disengaging from military 6.1 Sanctions: Uganda is not subject to cooperation” with North Korea to comply international sanctions. with UN sanctions.

The 2019 Peddling Peril Index57 (PPI), There are 7 entries, made up of 5 persons and focussed on proliferation, prepared by the 2 entities listed by US OFAC with addresses in Institute for Science and International Security, Uganda59. which classifies Uganda as a Tier 2 country, a country that does not have “extensive nuclear 7 entries on the OFAC list or other sensitive commodity supply US OFAC 2020 capabilities, but nevertheless pose a risk of 6.2 Terrorism/Extremism: According to the illicit or unauthorised supply, facilitation, or Global Terrorism Index60 2019, Uganda is transfer of such commodities”. Uganda has a ranked 49th highest out of 138 countries and ”moderate threat level 2”, and a “Low” controls scored 3.957/10 based on the impact of score of 295 out of 1,300 points, and ranked terrorism in the country which is categorised as 153rd among 200 countries. “Low” impact. Tier 2 Country - Low level of controls In the 2019 US Department of State Country PPI - 2019 Reports on Terrorism61, it was reported that no Iran has an embassy in Uganda. Uganda has terrorist incidents occurred in Uganda in 2019. embassies in Cuba, North Korea and Iran. The report provided the following overview: “The Government of Uganda (GOU) continued In 2015, the volume of reported North Korean to make important contributions toward CT exports to Uganda was US$487,000, while the efforts in East Africa and the Horn of Africa in volume of reported Ugandan exports to North 2019. As the largest troop contributing country Korea was US$97,00058. to AMISOM, Uganda remained a key partner in • Through the 1970s and 1980s, North regional efforts to neutralise al-Shabaab. Korea supplied arms and military training However, in April, ISIS claimed responsibility for to Uganda. More recently, North Korea attacks in eastern DRC conducted by the ADF, a has reportedly provided training and non- historically anti-Kampala armed group based in lethal equipment to Uganda's internal that area. This was the first claim by ISIS of an security forces. attack in the region and highlighted the • In 2016, following a bilateral summit persistent threat of ”. meeting between South Korean President

Uganda - Threat Assessment - 2020 Page 24 of 41 Uganda key partner in regional efforts the efforts of Ugandan and Congolese armed to neutralise Al Shabaab forces. The Ugandan government continues to US Report of Terrorism - 2019 take the threat of ADF action very seriously, and engages in efforts to destabilise and disrupt “The GOU is increasingly concerned by the group”. Whilst the The Lords Resistance security threats – terrorist and criminal – along Army is largely considered as a former terrorist Uganda’s western border with the DRC, organisation led by Joseph Kony, its leader has particularly from the ADF, which has a long still not been captured. For more details see history of killing civilians and planning attacks here.62 against Ugandan interests. However, no notable changes to Uganda’s border security 6.3 Terrorist Financing: According to the posture occurred in 2019, nor were there NRA, “the volume of terrorist financing is significant legislation or law enforcement estimated at US$100 million for all terrorist developments specific to CT”. groups in the region. The main funding sources According US 2020 OSAC report, they have include extortion, misuse of non-profit rated Kampala as a medium threat location for organisations (NPO), remittances, natural terrorism. “The largest terrorist threat in resources/wild life crimes, ransoms, piracy and Uganda comes from Somalia-based al- trade. In particular, Al-Shabaab’s main sources Shabaab, which objects to Uganda’s support of funding include extortion (including in the for the African Union Mission to Somalia form of illegal taxation), trade, foreign (AMISOM). The twin 2010 suicide bombings in remittances, donations, migrant smuggling, Kampala, which killed 76 people (including one wild life crimes and piracy; LRA’s main sources U.S. citizen), was al-Shabaab’s first successful of funds include wildlife crime, minerals, large-scale operation outside of Somalia, extortion and looting; and ADF’s main sources demonstrating that the group was willing and of funds include; trade, real estate business, able to launch attacks across the region. Al- wildlife crime, illegal mining, state sponsorship Shabaab vows to continue attacking interests and NPOs donations”. and citizens of countries supporting The NRA assesses the vulnerability of mobile AMISOM. While al-Shabaab remains a threat, money international remittances and mobile 2019 was largely void of any major actions by money person-to-person transfers for TF risk as the group (in Uganda)”. “High”, due to the rapidity of transactions, “Another regional terror organisation is the cross-border features available, relatively high (ADF), originally a daily limits, ability for customers to hold Uganda-based Islamist rebel group that multiple SIM cards, and lack of implementation formed in 1996 and engaged in battles with on AML/CFT requirements. See more under the Ugandan military in 2007 and 2008. The Section 7. ADF currently operates in eastern DRC, despite Uganda - Threat Assessment - 2020 Page 25 of 41 Uganda - Threat Assessment - 2020 Page 26 of 41 Section 7 - Money Laundering

In this Section 7, the focus is on Uganda’s supervision and oversight, poor entry controls, vulnerability to money laundering. near-absence of implementation of AML/CFT requirements by DNFBPs, and the widespread 7.1 Higher Risk Areas: Higher risk areas use of cash”, with the real estate sector posing (including from the NRA) are set out below. In the highest ML threat. many cases a single risk factor may not be evidence of actual higher risks. Real estate sector poses greatest threat amongst DNFBPs According to the NRA, “material elements such NRA - 2017 as the widespread use of cash, the informal economy, and the only very recently introduced “The risk of TF for DNFBPs is generally low, with national ID system and porous borders the exception of the real estate sector, as increase the country’s vulnerability to ML and terrorist groups can take advantage of real TF”. estate as a channel to finance their activities. The TF risk of the non-governmental Uganda Higher (Inherent) Risk Factors organisations (NGOs) is medium, although Customer Sector Geography Risks Risks Risks there are some NGOs that are currently being

Customers with elevated Banks (in particular retail Major export / import investigated for their involvement in TF” exposures to criminal and corespondent banks) partner countries (trade activities such as: mispricing via IFFs). drug trafficking, arms Money remitters, casinos, trafficking, wildlife dealers in precious metals Near neighbour countries, 7.2 Cash Based Money Laundering: trafficking, human & stones, forex dealers, including DRC & CAR trafficking real estate & lawyers (gold). According to the NRA, “Uganda’s economy is & people smuggling, Afghanistan Pakistan, SE fraud, terrorism finance & & hawala dealers. Asia and Western Europe, along with corruption (e.g as source and destination highly informal and cash-based. According to PEPs) which also help countries with East African facilitate these crimes & countries as transit the 5th Edition of the Uganda Economic tax evasion as a high risk Countries (heroin) & concern also South America (cocaine) Update (Feb 2015) by the World Bank, 70% of & South Sudan (arms). to Higher Risk Sectors Uganda’s labour force is employed in the and/or Geography Risks Tanzania, Uganda, DRC, China & Vietnam (wildlife products) & UK (luxury informal sector. According to UBOS (2014), the cars). informal sector’s contribution to GDP is more In 2017, the NRA documented that there were than 50%. Uganda has porous borders and 25 licensed commercial banks, 4 micro lacks natural barriers which make the borders deposit-taking institutions, and 4 credit loose and difficult to man, which facilitates institutions operating in Uganda. The financial smuggling and cross-border transportation of sector was assessed as having a medium cash”. The NRA further names the borders that vulnerability to ML, with company deposits and are considered porous and vulnerable to the trade finance most exposed to ML risks. As in transit or laundering of funds as Sudan, Kenya, most other African countries, the DNFBP sector Tanzania, and the DRC. posed medium to high threat levels, “largely due to the absence of an effective AML

Uganda - Threat Assessment - 2020 Page 27 of 41 The NRA attempts to explain the local context marketing of their products, who may not by saying that “The economy is largely always be very knowledgeable of the AML/CFT informal, the bulk of transactions in the banking requirements”. institutions are in cash, whether deposits or withdrawals. It therefore usually does not raise 7.4 Trade Based Money Laundering: suspicion where a customer makes large cash According to the NRA, trade finance is deposits or large cash withdrawals. An considered one of the methods most exposed example is provided relating to a customer to ML risk “given the high volume of mis- who deposited US$ 2 million in cash that he invoicing evidenced by the analysis of the ML transported to the bank in a bag. The bank threat” and is rated in the NRA as “medium reportedly deemed the explanation that he high”. The NRA further states that “trade is a provided on the source of funds as legitimate. high risk product by AML standards by its The NRA highlights that once cash has been nature” and that “being in third world some deposited, that the cash can be placed on trades can be pretty complex and vetting of all fixed depot, or moved to other accounts. parties may not be readily feasible. In the ”Funds laundered through commercial banks sampled institutions, 1,200 clients and with a may then be placed on fixed deposit accounts value of 483 Bn was noted which is significant. or transferred to other accounts. An analysis of The banks follow international rules e.g. large cash and suspicious transaction reports URC522 and UCP 600. Banks only indicates that large cash deposits on bank communicate between each other using SWIFT accounts are commonly followed by the messages for example MT707/MT799 and opening of fixed deposit accounts…… Placing MT730. This implies that transactions are only large sums of proceeds on a fixed deposit done for customers who are already banking serves two purposes: in the first instance, there with banks and thus their profiles are is income generated from the interest that monitored. In view of the fact that banks will accrues; secondly, the FD can be used as only deal with the documents supporting the security for a loan or mortgage, for acquisition trade transaction rather than the goods of property, other valuable chattels or themselves, there are opportunities to exploit improved lifestyle”. the trade cycle for criminal purposes. That is, 7.3 Mobile Money Risks: The NRA assesses non-face to face transaction occurs mostly”. the vulnerability of mobile money service providers (MMSPs) as “High”, “the main ML risk 7.5 Other Money Laundering: Securities, factors stem from the lack of a direct licensing/ Transaction and Virtual Currency laundering authorisation regime, inadequate AML/CFT are also important methods, however the NRA supervision and poor entry controls of the only includes securities, which are considered MMSPs, which are not AML/CFT- oriented. to have the lowest ML threat (Medium Low) in MMSPs also rely heavily on agents for the the financial sector. Uganda - Threat Assessment - 2020 Page 28 of 41 Uganda - Threat Assessment - 2020 Page 29 of 41 Section 8 - Illicit Funds including Estimated Criminal Proceeds

In this Section 8, the focus is on Uganda’s The risks increase in trade with so-called vulnerability to Illicit Financial Flows and Illegal advanced economies. Whilst not all IFFs are Proceeds and to the laundering of criminal and made up of criminal activity, a significant other illicit funds. proportion will be.

According to the African Union63 based on According to the sources and analysis carried work and data provided by GFI, it is estimated out in this Threat Assessment, estimates for that Uganda suffered from illicit financial flows criminal proceeds, laundered funds and funds from 2004-2013, averaging US$7,149 million a generated by corruption and organised crime, year, and US$228 million64 in 2017, according amongst others, are estimated in the following to Global Financial Integrity65 ranges: (GFI), to have left the Total Criminal Proceeds in Sub •Total estimates for criminal country. Saharan Africa in US$ Billions - FCN 2020 (not including fraud and proceeds combined of 10 to corruption and tax evasion) Uganda has a Tax to GDP 12%68 of GDP and with 15 - ratio of 13.0%66, which is the 20%69 of this estimated as 14th lowest in Africa, and Mining Fishing 10 2.5 costs of corruption. below the average African Wildlife 2 Goods Piracy 9 figure of 16.2%, and rated •Total estimates for monies across Africa as a “Medium” Logging 12.5 available for laundering Tax Collection Country. Modern Slavery 8.3 through the formal sector is Drugs 70 3 According to GFI, the most Theft 70 - 76% of criminal 15 common method for proceeds and 34 - 36%71 transferring illicit financial involving organised crime, funds, is through trade mis with most significant criminal pricing. GFI believe this method or series of actors being “Foreign Actors” and “State techniques may represent up to 80%67 of illicit Embedded Actors”, followed by “Criminal financial flows, and can involve abusive and or Networks”, and “Mafia Style Groups”. aggressive transfer pricing, trade mispricing The largest criminal markets in Uganda will and mis-invoicing, for example intentionally include corruption, arms trafficking, drug overpaying for imports of goods or services trafficking, wildlife trafficking, people (or underpaying for exports or services) is a smuggling & human trafficking, tax evasion, straightforward way of illegally transferring and those crimes identified as the largest monies out of a country. markets across Sub-Saharan Africa (see Pie Chart above).

Uganda - Threat Assessment - 2020 Page 30 of 41 Section 9 - Resilience & Response

In this Section 9, the focus is on Uganda’s level implementing policies and procedures for of resilience and response. identifying, tracing, seizing and confiscating proceeds and instrumentalities of crime; (7) 9.1 FATF: The last Mutual Evaluation Report demonstrating that LEAs conduct TF (MER) for Uganda published in 2016, and the investigations and pursue prosecutions latest follow up report68 was published in commensurate with Uganda’s TF risk profile; September, 2018. In February 202069, Uganda (8) addressing the technical deficiencies in the made a high-level political commitment to legal framework work with the to implement PF- FATF and related TFS and ESAAMLG to implementing a strengthen the risk based effectiveness of approach for its AML/CFT supervision of its regime, after NPO sector to being placed on prevent abuse for the FATF’s TF purposes. Strategic deficiencies list. Based on a simple scoring Uganda agreed model to implement its developed by action plan, FCN, Uganda including by: (1) was rated in 2018 adopting a as at 50% for national AML/ "Technical CFT strategy; (2) Compliance.” seeking international cooperation in line with Scores for Effectiveness based on scores for the country’s risk profile; (3) developing and “Immediate Outcomes” are zero for all 11 IOs, implementing risk-based supervision to FIs and as a result, against the 4 core IOs too. and DNFBPs; (4) ensuring that competent authorities have timely access to accurate basic Focussing just on core elements of the 40 and beneficial ownership information for legal Recommendations (Key Recommendations): entities; (5) demonstrating LEAs and judicial R8 (NPOs) - NC, R10 (CDD) - PC, R12 (PEP) - authorities apply the ML offence consistent PC, R13 (CBR) - C, R14 (MVTS) - LC, R15 with the identified risks; (6) establishing and (NewTech) - PC, R22 - (DNFPBs CDD) - PC, R26

Uganda - Threat Assessment - 2020 Page 31 of 41 (FI Supervision) - NC, R28 (DNFPBs Uganda does, however, achieve moderate Supervision) - NC & R29 (FIU) - PC. Taking scores in some categories, such as prevention these core elements, FCN scores Uganda at and international cooperation, having signed a 33%. number of relevant treaties on organised crime. But, once again, the country is reported to be 9.2 Resilience to Organised Crime: In terms falling short in implementing protocols and of “Resilience” to financial crime, Uganda agreements.” scored 3.63/10 (“Low Resilience”) and ranks 29/54 African countries, made up of “AML” - 9.3 Freedom: Beyond the definitions ascribed 3.0/10 for “International Co-operation” - to human trafficking and/or modern slavery, a 4.5/10, for “Law Enforcement” - 3.0/10, and for broader concept of freedom is described by "Economic & Regulatory Environment” - Freedom House’s, Freedom in the World Index, 3.5/10. which ranks countries and their citizens as either, “free” “partly free” or “not free.” Uganda “Low Resilience” scored 34/100, and is rated “not free70”. OC Index - 2019

“Not Free” According to the African OC Index, “Uganda Freedom in the World Index - 2019 ranks 29th in Africa for resilience, performing just below the continental average. Uganda’s According to the Heritage Foundation’s 2019 resilience scores are low, ranging from 2 to 5 – Index of Economic Freedom71, Uganda’s at best moderately effective and at worst economic freedom score is 59.5/100 making extremely ineffective. its economy one described as “mostly unfree”.

The main reason for these low scores is the 9.4 Basel AML Index: According to the failure to implement policies and measures to 201772 findings, Uganda scored 7.95/10 in the combat organised crime. Although the Basel AML Index, rated 10/146 countries. government has been vocal in its opposition Uganda has not been included in the public organised crime, corruption at all levels and index since 2017. lack of implementation of effective policies and laws lead experts to score state resilience as 9.5 Governance: The Mo Ibrahim Foundation 73 poor overall. Governance 2018 scores Uganda at 55/100 (African average is 49.9) and 20/54 in Africa, “Although vocal in opposition to with an “Increasing Improvement” trend. organised crime, there is a lack of implementation” 9.6 Asset Seizures: According to the NRA, the OC Index - 2019 duty to investigate money laundering falls to the police, however, Uganda’s financial crime investigators are not well equipped in capacity

Uganda - Threat Assessment - 2020 Page 32 of 41 or resources, and also lack “a set structure to • Absence of clear process by the FIA pursue parallel financial investigations”. The governing protection of information application of parallel investigations when • Lack of information being reported on conducting criminal investigations is not yet cross-border transportation of cash well appreciated in Uganda. The NRA does not provide any statistics or values on the forfeiture • That the current provisions of the of assets deemed to be proceeds of crime, but legislation setting out the functions of the does highlight that “the asset Forfeiture laws Board do not guarantee the operational broadly provide for seizure and forfeiture of independence of the FIA, and crime proceeds under the conviction based • Failure to take steps to apply for Egmont system”. A recommendation is made to “enact membership. the non-conviction forfeiture provisions and civil forfeiture laws”. The ESAAMLG Follow Up Report in 2018, decided not to re-rate the PC rating saying that 9.7 Financial Intelligence Unit: The Uganda the remaining deficiencies relating to strategic Financial Intelligence Authority (FIA) was analysis and membership of the Egmont established in July 2014, and became a Group were important deficiencies. Uganda member of the Egmont Group in July 2019. has since then joined Egmont in 2019. According to the NRA, the FIA’s effectiveness is According to the NRA, from January to hampered by its “inability to tap into December 2015, 309 suspicious transaction intelligence information available in large cash reports (STRs) were received by the FIA, 301 of transaction reports due to lack of an IT system these reports were from the commercial banks. to consolidate the reports and facilitate 64 of these reported STRs were closed, 191 meaningful analysis” and the “lack of direct were a work in progress, and 54 STRs were interface with other national databases” which disseminated to the Uganda Revenue affects the the efficacy of the analysis they are Authority (26), Police (26) and the Inspectorate required to perform to execute their mandate. of Government (2). From January to December The 2016 MER conducted by ESAAMLG 2016, 92 STRs were reported, 90 of these highlighted deficiencies in terms of reports were from the commercial banks. 18 of Recommendation 29 for Financial Intelligence these STRs were closed, and 18 STRs were Units, such as: disseminated to the Uganda Revenue Authority (11), Police (2) & the Inspectorate of • Not conducting strategic analysis Government (5). • Dual reporting of STRs to different competent authorities

Uganda - Threat Assessment - 2020 Page 33 of 41 Section 9 - Resilience & Response Continued

Based on the FCN Sub-Saharan Africa Risk Rating Model, Uganda is rated overall at “Low” for its response at 23/100. Ranges for individual components are summarised below, with Low Response - RED, Moderate Response - Amber & Higher Response - Green, (see Section 4 for actual ratings). Key component ratings over showing the progress for FATF MER ratings and for OC Index for Resilience, and over time in the Mo Ibrahim African Governance Index and the Basel AML index are also shown.

Uganda - Threat Assessment - 2020 Page 34 of 41 Section 10 - Observations & Recommendations (O&Rs)

Based on this SA Threat Assessment, the • Stakeholders should consider how to further following O&Rs are made as follows: enhance the response of the private sector, and in so doing, incentivise an improvement Overall O&Rs: in “preventative measures” by moving • The National AML Risk Assessment beyond current FI / DNFPB assessments published in 2017 should be refreshed. based on technical compliance to one based more broadly on testing effectiveness. • The Uganda Financial Intelligence Authority (FIA) should respond to the weaknesses O & R for Uganda Financial Institutions: FIs highlighted in the NRA and in the 2016 FATF to consider whether their AML/CTF MER to address the “partially compliant” programmes reflect the threats identified rating for Recommendation 29 - FIU. The FIA here, &/or if changes are needed. should consider establishing a Ugandan O & R for Foreign Financial Institutions: Financial Information Sharing Partnership. Foreign FIs that have exposure to Uganda from • The action plan agreed with ESAAMLG and outside the country, may want to consider: FATF should be implemented, and when • PEPs are likely inherently higher risk, due to achieved, the country could be removed high levels of corruption in Uganda, and the from FATF & EU Strategic Deficiencies List. “State Embedded Actor” scores in the OCI, • The agencies responsible for asset recovery therefore FIs should consider undertaking should target greater asset recoveries than EDD+ and heightened monitoring. those reported in the past, which represent • Uganda can be considered “Very High”” FC significantly less than 1% of estimated risk from a foreign FI perspective, relative to criminal proceeds generated. other countries. • The existence of high level corruption • Following publication of the 2018 MER in facilitates criminality and as a result, 2019, all core Recommendations that rated combating corruption remains crucial. The either PC or NC, such as: R8 (NPOs) - NC, country should increase resources to levels R10 (CDD) - PC, R12 (PEP) - PC, R15 commensurate with meeting fighting (NewTech) - PC, R22 - (DNFPBs CDD) - LC, financial crime expectations, as well as R26 (FI Supervision) - PC, R28 (DNFPBs reviewing current priorities to ensure a focus Supervision) - NC & R29 (FIU) - PC should be on main criminal markets and those activities of concern to foreign FIs dealing with that pose the greatest threats and harms, Ugandan FIs and DNFPBs. including “green crimes”.

Uganda - Threat Assessment - 2020 Page 35 of 41 Appendix 1 - Range Matrices by FCN

In Section In Section 8, Illicit funds including “Criminal Proceeds”, estimates for criminal funds in percentage terms and for “Costs of Corruption”, as well as estimates for “Laundering” and “Organised Crime” are set out, based on the inputs and calculations explained below.

1. Criminal Proceeds and Corruption: Table A1 below illustrates how the final estimates for “Criminal Proceeds” and “Costs of Corruption” are estimated. By taking the level of “Criminality” in the OC Index 2019, and the score from TI’s Corruption Index 2019, FCN’s overall Country Risk Rating, and based on the aggregate of these 3 sources, a final range estimate for criminal proceeds can be established. For corruption, the three sources are used, but ranges then depend on the level of corruption based on TI’s Corruption Perception Index 2019 score.

Table A1. Range Matrix for Estimating Criminal Proceeds & Corruption by FCN - 2020 - (Very High Rating is 4, High Rating is 3, Moderate Rating is 2 & Low Rating is 1 - with all scores aggregated for OCI Criminality, TI CPI & FCN Country Score-1

Bottom of the Range % of Top of the Range % of GDP Corruption % of Proceeds If Corruption % of Proceeds If Corruption % of GDP If Score GDP Very High Levels (CPI) High Levels (CPI) Moderate Levels (CPI)

12 10.5% 12.5% 15-20% 10-15% 5%-10%

11 10% 12% 15-20% 10-15% 5%-10%

10 9.5% 11.5 15-20% 10-15% 5%-10%

9 9% 11% 15-20% 10-15% 5%-10% (Includes a V High)

9 8.5% 11.5% 15-20% 10-15% 5%-10% (No V Highs)

8 8% 11% 15-20% 10-15% 5%-10%

7 7.5% 10.5% 15-20% 10-15% 5%-10%

6 7% 10% 15-20% 10-15% 5%-10% (Includes a High)

6 6.5% 9.5% 15-20% 10-15% 5%-10% (No Highs)

5 6% 9% 15-20% 10-15% 5%-10%

4 5.5% 8.5% 15-20% 10-15% 5%-10%

3 5% 8% 15-20% 10-15% 5%-10% (Includes a Moderate)

3 4.5% 7.5% 15-20% 10-15% 5%-10% (no Moderates)

2 4% 7% 15-20% 10-15% 5%-10%

1 3.5% 6.5% 15-20% 10-15% 5%-10%

Note: TI CPI Scores below 50 are rated: 40-49 Moderate to High, 30 to 39, High, below 30 Very High; OCI Criminality Scores are rated: 6 or above at Very High, 5 - 5.9 at High, 4 - 4.9 Moderate and below 4 as Low; FCN Scores are rated: 1-19 - Extremely High, 20 - 29 Very High, 30 - 39 High, 40 - 49 Moderate - High, 50 - 59 Moderate, 60 - 69 Low- Mod, 70 - 79 Low, & 80 - 100. For Costs of Corruption, ranges then depend on the level of corruption based on TI’s Corruption Perception Index 2019 score. For more details on source information for the OC Index, see HERE74, for TI CPI Index see HERE75 and for the results for Nigeria for criminality for corruption and the FCN Country Risk Rating Score see Section 3 above.

Uganda - Threat Assessment - 2020 Page 36 of 41 2. Monies available for Laundering: Table A2 below illustrates how the final estimates for the range for “Monies available for Laundering” was established. The top of the estimated range is 76% of “Criminal Proceeds”, based on the findings of the UNODC 2011 Study, which found that of US$2.1 trillion estimated global proceeds, that US$1.6 trillion was available for laundering or 76%, and that most of this this was expected to be available to be laundered via the formal financial sector. Based on the relatively low levels of financial inclusion in most Sub-Saharan African countries compared with the rest of the world, and the size of the shadow and informal economies, as well as the ongoing dominance of cash within Sub-Saharan economies, the estimates available for laundering through the formal financial sector have been assessed with these factors in mind, based on the range estimates set out below, from sources estimating bank account and mobile money penetration. Uganda is rated “Higher.” For more details on information on financial access, see HERE76.

Table A2. Ratings Range Matrix for Laundering by FCN - 2020

Financial Access Range % for Laundering Financial Access Range % for Laundering Criminal Proceeds Criminal Proceeds

V Low Access Levels 40-50 Moderate Access Levels 60-70 < 30% bank accounts AND >40% - 50% bank accounts <30% mobile money OR >40% - 50% mobile money OR vice versa

Lower Access Levels 50-60 Higher Access Levels 70-76 >30% - 40% bank accounts > 50% bank accounts OR OR >30% - 40% mobile money > 50% mobile money

3. Criminal Proceeds Involving Organised Crime: Table A3 below illustrates how the final estimates for the range for “Criminal Proceeds” involving organised crime was established. The top of the estimated range is 46% of “Criminal Proceeds”, based on the findings of the UNODC 2011 Study, which found that of US$2.1 trillion organised crime were involved in US$960 million or approx 46%. Table A3 takes the different scores for organised crime in Sub-Saharan African countries reported by the OC Index and presents an estimate, or range as a % of "Criminal Proceeds”, established as set out in Appendix 1 Section 1 above. Uganda is rated “High”. For more details on OC information, see HERE77.

Table A3. Ratings Range Matrix for Involvement by Organised Crime by FCN - 2020

Criminal Actors Score in OC Index Range % for OC Financial Criminal Actors Score in OC Index Range % for OC Involvement Involvement

Below 4 /10 in OC Index 2019 22-24 Rated 6 - 6.5/10 in OC Index 2019 32-34

Rated 4 - 4.5/10 in OC Index 2019 24- 26 Rated 6.5 -7/10 in OC Index 2019 34-36

Rated 4.5-5/10 in OC Index 2019 26-28 Rated 7-7.5/10 in OC Index 2019 36-38

Rated 5-5.5/10 in OC Index 2019 28-30 Rated 7.5-8/10 in OC Index 2019 38-40

Rated 5.5-6/10 in OC Index 2019 30-32 Rated 8/10 in OC Index 2019 or above 40-46

Uganda - Threat Assessment - 2020 Page 37 of 41 Endnotes: 1 See: https://migrationdataportal.org/data?focus=profile&i=stock_abs_&t=2019&cm49=800 2 See: https://www.cia.gov/library/publications/the-world-factbook/geos/ug.html 3 See: https://epi.yale.edu/epi-indicator-report/EPI 4 See: https://wttc.org 5 See: https://www.knomad.org/sites/default/files/2020-04/Remittance inflows April 2020.xlsx 6 See: https://datareportal.com/reports/digital-2020-uganda 7 See: https://www.fia.go.ug/money-laundering-and-terrorism-financing-national-risk-assessment-report 8 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 9 See: https://www.transparency.org/cpi2019?/news/feature/cpi-2019 10 See: https://www.transparency.org/en/cpi/2018/results/uga 11 See: https://www.traceinternational.org/trace-matrix#matrix-results 12 See: https://www.pwc.com/ug/en/assets/pdf/gecs-2018-report.pdf 13 See: https://www.transparency.org/en/gcb/africa/africa-2019/results/uga 14 See: https://images.transparencycdn.org/images/2019_GCB_Africa3.pdf 15 See: https://www.u4.no/publications/uganda-overview-of-corruption-and-anti-corruption.pdf 16 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 17 See: https://enact-africa.s3.amazonaws.com/site/uploads/2020-03-05-heroin-coast-02.pdf 18 See: http://reports.weforum.org/global-competitiveness-report-2019/competitiveness-rankings/? doing_wp_cron=1576075219.7585289478302001953125#series=EOSQ035 19 See: https://www.traffic.org/site/assets/files/8460/uganda_wildlife_assessment.pdf 20 See: https://www.state.gov/2019-end-wildlife-trafficking-report/ 21 See: https://www.reuters.com/article/us-uganda-landrights-deforestation/cutting-everything-in-sight-ugandans-vow-to-curb-rampant-deforestation- idUSKBN1QT03E 22 See: https://nema.go.ug/sites/all/themes/nema/docs/Uganda%20Environment%20Information%20Network%20Bulletin%20Issue%201.pdf 23 See: https://news.mongabay.com/2016/01/will-uganda-be-able-to-fulfill-its-pledge-to-protect-its-forests/ 24 See: https://www.nfa.org.ug/index.php/12-nfa-news/134-press-brief 25 See: https://allafrica.com/stories/201901040496.html 26 See: https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/uganda-undermined/ 27 See: https://www.miningreview.com/gold/illegal-gold-mining-mafia-in-uganda-behind-death-threats/ 28 See: https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods-print 29 See: https://issafrica.org/amp/iss-today/sweeping-illegal-sand-mining-under-the-rug-in-uganda 30 See: https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods? combine=&field_exp_exploitation_type_target_id_1=All&tid=All&field_exp_good_target_id=All&items_per_page=10&order=name&sort=asc&page=38 31 See: https://ourworldindata.org/illicit-drug-use 32 See: https://enactafrica.org/research/trend-reports/police-crime-syndicate-disrupted-in-uganda 33 See: https://enactafrica.org/research/analytical-reports/interpol-overview-of-serious-and-organised-crime-in-east-africa-2018 34 See: https://www.osac.gov/Country/Uganda/Content/Detail/Report/972253e2-8a5b-4164-b3c5-18824394519c 35 See: https://www.globalslaveryindex.org/2018/findings/regional-analysis/africa/ 36 See: https://www.globalslaveryindex.org/2018/findings/regional-analysis/africa/ 37 See: https://www.state.gov/wp-content/uploads/2020/06/2020-TIP-Report-Complete-062420-FINAL.pdf 38 See: https://www.conflictarm.com/reports/weapon-supplies-into-south-sudans-civil-war/ 39 See: https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/ trends_in_trade_in_counterfeit_and_pirated_goods/trends_in_trade_in_counterfeit_and_pirated_goods_en.pdf 40 See: https://www.osac.gov/Country/Uganda/Content/Detail/Report/972253e2-8a5b-4164-b3c5-18824394519c 41 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 42 See: https://www.voanews.com/africa/uganda-seizes-ivory-smuggled-timbers 43 See: https://www.monitor.co.ug/News/National/Ugandans-top-drug--smugglers---Interpol-/688334-4532392-lx34bd/index.html 44 See: https://www.wsj.com/articles/under-cover-of-coronavirus-lockdown-a-booming-trade-in-conflict-gold-11594285200 45 See: https://www.ura.go.ug/Resources/webuploads/GNRART/Annual%20Press%20%20Brief%20-FY%202018-19%20shared%2015th%20July%2019.pdf 46 See: https://www.pwc.com/ug/en/assets/pdf/gecs-2018-report.pdf 47 See: https://www.osac.gov/Country/Uganda/Content/Detail/Report/972253e2-8a5b-4164-b3c5-18824394519c 48 See: https://www.africaportal.org/publications/income-tax-evasion-uganda/ 49 See: https://www.itu.int/dms_pub/itu-d/opb/str/D-STR-GCI.01-2018-PDF-E.pdf 50 See: https://www.forensicsinstitute.org/cybercrime-in-uganda/ 51 See” https://www.osac.gov/Country/Uganda/Content/Detail/Report/972253e2-8a5b-4164-b3c5-18824394519c 52 See: https://abc7news.com/uganda-kidapping-american-kidnapped/5239931/ 53 See: https://www.aa.com.tr/en/africa/armed-congolese-group-abducts-ugandan-businessman/1553647

Uganda - Threat Assessment - 2020 Page 38 of 41 54 See: https://www.dw.com/en/ugandans-concerned-with-kidnapping-spree/a-44025850 55 See: https://www.theglobaleconomy.com/indi_menu.php?page_url=rankings&indicator=theft&type=0&withDataFor= 56 See: https://www.numbeo.com/crime/rankings_by_country.jsp?title=2020&displayColumn=0 57 See: https://isis-online.org/uploads/isis-reports/documents/ThePeddlingPerilIndex2019_POD.pdf 58 See: https://www.northkoreaintheworld.org 59 See: https://sanctionssearch.ofac.treas.gov 60 See: http://visionofhumanity.org/app/uploads/2019/11/GTI-2019web.pdf 61 See: https://www.state.gov/reports/country-reports-on-terrorism-2019/uganda/ 62 See: https://thefinancialcrimenews.com/lords-resistance-army-terrorist-group/ 63 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 64 See: https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-content/uploads/2020/03/GFI-Trade-IFF-Report-2020-Final.pdf? time=1583530239 65 See: https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-content/uploads/2020/03/GFI-Trade-IFF-Report-2020-Final.pdf? time=1583530239 66 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 67 See: https://gfintegrity.org/gftrade/ 68 See: https://esaamlg.org/reports/FUR%20Uganda-%20September%202018.pdf 69 See: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html 70 See: https://freedomhouse.org/report/countries-world-freedom-2019 71 See: https://www.heritage.org/index/ranking 72 See: https://www.baselgovernance.org/sites/default/files/2019-08/Basel%20AML%20Index%202019.pdf 73 See: http://iiag.online 74 See: https://ocindex.net 75 See: https://www.transparency.org/cpi2019?/news/feature/cpi-2019 76 See: https://datareportal.com/library 77 See: https://ocindex.net

Uganda - Threat Assessment - 2020 Page 39 of 41 Message from the Editor - FCN

This Country Threat Assessment focuses on the financial crime threats and responses and is both a stand-alone publication, but can also be read in conjunction with the Global Threat Assessment, published in 2019 and the Sub-Saharan Threat Assessment published in 2020. The Sub-Saharan Threat Assessment has been supplemented by this country threat assessment, as well as for other countries in Sub-Saharan Africa. The individual threat assessments have been co-created with dedicated financial crime fighters from the countries covered, and/or with the help of professionals familiar with the country and the region, based on a consistent approach researching available open source information. Judgement has been applied in deciding what to include and what to emphasise. Each threat assessment follows the same structure and includes the same main sources, usually over 60 sources from important and credible agencies, in the form of reports, papers and or ratings. The threat assessments include the results from the FCN Sub-Saharan Africa 2020 Risk Rating Scorecard which includes a significant number of these sources to aggregate the threats and the responses to derive a final rating and a final ranking.

More Financial Crime Materials from FCN

Global Threat Phase 1 - 19 Country Sub Saharan Africa Sub Saharan Africa Assessment by FCN - Threat Assessments Country Risk Ratings Threat Assessment by 2019 by FCN - 2020 FCN - 2020

Available at: https://thefinancialcrimenews.com For Subscription for Commercial Businesses / Free to NGO’s and Policy Makers Or Contact the Editor: [email protected]

Author(s) & Editor The Co Authors of this work are John Cusack & Ursula M’Crsytal. The Editor is John Cusack, the publisher is Financial Crime News / Metriqa Limited. All rights remain with FCN/ Metriqa Limited.

John Cusack is a leading financial crime fighter, Founder & Editor of the Financial Crime News, former Global MLRO at UBS and Standard Chartered Bank, Two time Co Chair of the Wolfsberg Group (to end 2019), Board Member of the Tarffik Analysis Hub, a Human Trafficking NGO, & adviser to Leading Regtech Providers Quantexa and Caspian and to numerous FI’s. Ursula M’Crystal is a leading financial crime fighter, specialising in Sub Saharan Africa and in financial intelligence and Investigation, with prior leadership experience with both Standard Bank and Standard Chartered Bank..

Acknowledgements: Thanks and appreciation to a number of colleagues and collaborators who freely gave their time, to research, comment and provide advice in connection with this Country Threat Assessment, including: Hannah Cusack, Hans Peter Bauer, Alois Maluvu, Victoria Meyer, Bruce Viney & Andrew Williams

Information to Note: The information, provided in this Country Threat Assessment is designed to help those involved in combating financial crime. The Editor (John Cusack) takes responsibility for the contents of this document, including any opinions, observations or recommendations, but does not take responsibility for referenced materials, that are the responsibility of the authors and as appropriate. References are provided for information purposes and do not constitute endorsement of any information. readers should be aware that website references listed may change More Financial Crime Materials from FCN

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