Effective June 6, 2022, WorldRemit, a digital payments service, will not be accepting any new money transfers or airtime top-ups from Uganda as the East African country faces a looming international ban for alleged money laundering and terrorist financing.
“From 6 June, WorldRemit will not be accepting any new money transfers or airtime top-ups from Uganda. From 6 July, WorldRemit will be fully closing money sending services in Uganda, and our relationship with you will come to an end,” a message from WorldRemit to its customers in Uganda reads in part.
However, the change affects money transfers and airtime top-ups sent from Uganda only. Transfers to Uganda will still be accepted on the platform.
While WorldRemit does not give a clear explanation for the decision, this comes as Uganda’s financial industry faces being blacklisted by international systems for failure to put in place measures that can effectively prevent financial crimes like money laundering.
This is a requirement by the Financial Action Task Force (FATF), a global inter-governmental organisation on the initiative of the G7countries to develop policies to combat money laundering and terrorism financing.
Uganda was put on the ‘Grey List’, a list that shows the performance of countries regarding the safety or level of risk of their financial systems.
This came after the FATF declined to adopt Uganda’s Money Laundering and Terror financing risk assessment report done by the Ministry of Finance, the Financial Intelligence Authority (FIA) and some NGOs in 2018.
This was what the European Union based on to blacklist Uganda’s financial sector.
To avoid being downgraded to the “Blacklist”, the Executive Director of the Finance Intelligence Authority, Sydney Asubo, revealed that Uganda risks being blacklisted by the Financial Action Taskforce (FATF) if the government does not tackle money laundering by May 2022. Uganda must submit a revised report by May 2022, showing improvements responding to the gaps that were cited in the current report.
A Grey List features countries whose measures against money laundering and terrorism financing, are not satisfactory and need to upgrade.
Asubo said the consequences are dire because the impact of being on the grey list means that the world is aware that the country is having challenges in addressing money laundering.
“Some people have already started feeling the impact especially international transactions which would take a day or two, are now taking a week or two. That process of scrutiny is beyond the normal scrutiny,” he said.
Uganda joins Singapore and Russia among the countries where WordRemit transactions have been blocked.