Real es­tate and bet­ting at­tract il­licit money

A del­e­ga­tion of global anti-money laun­der­ing team is set to as­sess eforts Uganda has put in place

The East African - - NEWS - By BERNARD BUSUULWA The Eastafrican

Gam­ing, real es­tate and le­gal prac­tice are at high risk of pro­vid­ing av­enue for laun­dered money into Uganda’s econ­omy. Ac­cord­ing to find­ings from the Na­tional Risk As­sess­ment re­ports, there is a need for tight reg­u­la­tions in th­ese sec­tors as the coun­try seeks to im­prove its an­ti­money laun­der­ing en­force­ment regime.

The Na­tional As­sess­ment re­ports Risk are a com­pli­ance re­quire­ment set by the Fi­nan­cial Ac­tion Task Force (FATF), a global or­gan­i­sa­tion based in France that co-or­di­nates en­force­ments tar­get­ing money laun­der­ing and ter­ror­ism fi­nanc­ing in more than 155 coun­tries. Money laun­der­ing refers to the process of trans­fer­ring ill-got­ten in­come through the fi­nan­cial sys­tem and con­ceal­ing it by ac­qui­si­tion of le­git­i­mate as­sets like land and build­ings.

Th­ese re­ports cov­ered six se­lected pro­fes­sions deemed sig­nif­i­cant in the lo­cal econ­omy and ma­jor sec­tors like bank­ing, in­sur­ance and cap­i­tal mar­kets, ac­cord­ing to the Fi­nan­cial In­tel­li­gence Author­ity (FIA) — the lead agency charged with en­force­ment of anti money laun­der­ing and anti ter­ror­ism fi­nanc­ing laws.

The as­sess­ment re­ports were ap­proved by the Cab­i­net earlier this year and will be re­viewed by a FATF del­e­ga­tion, which is ex­pected in Kam­pala be­fore end of Septem­ber. The re­sults of this re­view mis­sion will in­flu­ence FATF’S de­ci­sion to ei­ther re­move or re­tain Uganda on the list of coun­tries that have ex­hib­ited se­vere weak­nesses in their an­ti­money laun­der­ing regimes.

The risk as­sess­ment re­ports re­vealed that gam­bling in­dus­try bears one of the high­est money laun­der­ing risks with a score of 0.73. Ac­cord­ing to the as­sess­ment score card, an out­come of more than 0.7 is con­sid­ered high risk while a score be­low 0.5 is rated low risk.

Ex­po­sure to money laun­der­ing ac­tiv­i­ties is largely at­trib­uted to strong in­vestor par­tic­i­pa­tion tied to coun­tries with huge money laun­der­ing chal­lenges that in­clude Is­rael, Rus­sia and China. In ad­di­tion, pref­er­ence for phys­i­cal cash pay­ments within casi­nos and bet­ting shops as op­posed to bank trans­fers is equally blamed for the in­dus­try’s high money laun­der­ing risks.

Uganda’s gam­bling in­dus­try is com­posed of less than 10 li­cenced casi­nos and more than 50 bet­ting out­lets be­long­ing to dif­fer­ent com­pa­nies, which are scat­tered in var­i­ous ur­ban cen­tres.

While the casi­nos at­tract high end clients with lots of money to spend on so­phis­ti­cated games like Rus­sian Roulette and Black Jack, small gam­ing shops spe­cialise in sports bet­ting prod­ucts that of­fer low ticket prices of Ush1,000 ($0.28) per unit and al­low gam­blers to bet on more than one game un­der the same ticket.

Sports bet­ting at­tract low end clients that in­clude stu­dents who pre­fer plac­ing bets on Euro­pean soc­cer league games and na­tional team soc­cer matches. The gam­bling in­dus­try cur­rently gen­er­ates an­nual turnover of Ush70 bil­lion ($19.3 mil­lion) and is gov­erned by the Gam­ing and Lot­ter­ies Act of 2016.

A pre­vi­ous scan­dal that in­volved for­eign share­hold­ers of Ceasar’s Palace Casino, a City gam­bling house that closed shop last year of­fered clues on the scale of money laun­der­ing chal­lenges faced by the in­dus­try.

A nasty fall­out ex­pe­ri­enced in 2015 amongst the Is­raeli and Ar­gen­tinian in­vestors that man­aged the casino re­port­edly callaed for the in­ter­ven­tion of some in­di­vid­u­als as­so­ci­ated with their na­tive coun­try as they bat­tled over shar­ing prof­its re­alised from the gam­ing busi­ness, in­dus­try sources claimed.

“A pre­vi­ous case of vi­cious in­fight­ing be­tween some play­ers in the sec­tor that had links to for­eign mafia groups prompted us to seek In­ter­pol as­sis­tance so as to im­prove su­per­vi­sion in the mar­ket. We also brought the head of Po­lice Crim­i­nal

A pre­vi­ous case of vi­cious in­fight­ing be­tween some play­ers in the sec­tor that had links to for­eign mafia groups prompted us to seek In­ter­pol as­sis­tance so as to im­prove su­per­vi­sion in the mar­ket.”

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