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Publications

Uganda's Mining Legal Regime: Addressing Illicit Financial Flows Risks and Revenue Loss in the Mineral Supply Chain

The mineral sector’s legal, regulatory, and institutional framework is governed by the 1995 Constitution [as amended in 2005], the Mining and Mineral Policy (2018), the Mining and Minerals Act, Cap.159, and the attendant Regulations. Other relevant laws include; The East African Community Customs Management Act, 2004; Public Finance Management Act, Cap. 171; Income Tax Act, Cap. 338; The International Conference on the Great Lakes Region (Implementation of the Pact on Security, Stability, and Development in the Great Lakes Region) Act, Cap. 188; The Companies Act, Cap.106 among others (UGEITI, 2023). However, this research report focuses on the Mining and Minerals Act, Cap. 159, and the Income Tax Act, Cap. 338.

The International Conference on the Great Lakes Region: Understanding the Role of the Regional Initiative Against Illegal Exploitation of Natural Resources in the Enhancement of Domestic Revenue Mobilization in Uganda

The Great Lakes Region of Africa is an example of the paradox of poverty amidst plenty. On the one hand, it is home to a substantial number of natural resources which are in great demand on the global market. On the other hand, its population lives in great poverty and the region’s recent history has been marked by disastrous effects of armed conflicts. The abundance of natural resources has not yet transformed the region into a state of inclusivity that guarantees socio-economic well-being for the population. Illegal exploitation of natural resources and unbalanced trade rob countries in the region of their rightful revenue and fuel conflicts and political instability. Domestic revenue mobilization and illicit financial flows, such as illegal mineral exploitation, are known opposing forces in building effective developmental states. Gaps in policies and compliance within regulatory regimes allow illicit financial flows, hindering countries' abilities to mobilize essential domestic revenue.

Enhancing Domestic Revenue Mobilisation Through Formalisation of Artisanal and Small-Scale Mining in Uganda

Uganda’s mining sector is heavily dependent on artisanal and smallscale mining (ASM), which is often conducted outside the legal, fiscal, and institutional regulatory frameworks. This lack of regulation complicates efforts to address the environmental, social, and economic challenges associated with ASM. Unlike large-scale mining operations, ASM relies on minimal capital investment and utilizes manual labour or light machinery. ASM accounts for over 90% of the country’s mineral production, involving valuable resources such as gold, tin, tungsten, tantalum, limestone, marble, and iron ore. The sector’s informality has resulted in its contributions to the economy largely unaccounted for, explaining its less than 1% contribution to GDP. Despite its significant role, ASM remains largely informal, leading to minimal government oversight and limited revenue collection. The Mining and Minerals Policy, 2018, and the Mining and Minerals Act, Cap. 159 aims to formalize, organize, and develop ASM through registration, licensing, and regulation.

Status of implementation of Beneficial Ownership Laws in Uganda

Beneficial ownership transparency is an important tool in the global fight against financial crimes. In recent years, Uganda has made notable progress in implementing beneficial ownership (BO) laws to align with international requirements. The Ugandan legal framework has been strengthened through several amendments to existing relevant laws. Beneficial ownership transparency is important for Uganda to: promote compliance with international standards and commitments, enhance corporate transparency and accountability, prevent the misuse of legal entities for illicit purposes, and support efforts to combat money laundering, terrorist financing, tax evasion, and corruption. This factsheet summarizes the current landscape and status of BO implementation in Uganda, highlights the key laws, the progress made in establishing disclosure mechanisms, and the remaining hurdles in ensuring effective implementation.

Leveraging Mineral Value Addition To Accelerate Attainment Of Uganda’s Ten-Fold Growth Strategy

Mineral value addition refers to the process of enhancing raw minerals by transforming them into intermediate or final products with higher market value. This process involves key stages such as beneficiation, processing, refining, and manufacturing. By adding value to minerals, countries can increase revenue, generate employment, and promote technological advancement. The implementation of mineral value addition requires the active involvement of the private sector, public institutions, partnerships between public and private entities, mining stakeholders, and research institutions, all working collaboratively to achieve targeted economic and development goals.

Domestic Revenue Mobilisation in Uganda

The factheet on Domestic revenue mobilization (DRM) describes the method by which a nation locally raises financial resources to meet its demands for public service delivery and development. DRM has emerged as a central focus of the agenda for sustainable development. It comprises both tax and non-tax revenue. Mobilizing domestic revenue is essential for each country’s poverty reduction strategies, long-term economic growth, and financing of vital socio-economic programs.

Uganda Exits The Financial Action Task Force’s Grey List, But More Needs To Be Done

In February 2024, the Financial Action Task Force (FATF) removed Uganda from its list of countries with deficiencies in anti-money laundering (AML) and counter-terrorist financing (CFT) systems usually referred to as “the grey list.” The FATF grey list identifies countries that need to improve their AML/CFT systems. Being on the grey list has potential economic repercussions. Therefore, the FATF publishes a grey list to help member countries reflect and manage risks associated with these countries and to rekindle their commitment to addressing the identified weaknesses. This fact sheet unpacks the FATF Standards/Recommendations. It also explains the implications of being placed on the FATF grey list. In addition, it identifies challenges and makes recommendations for Uganda to prevent being re-listed ahead of its next round of assessment in 2028.

Trade-Based Money Laundering in Uganda

Trade-Based Money Laundering (TBML) as a forms of Illicit Financial Flows (IFFs) has become a commonly used method to launder money. TBML is one of the most sophisticated methods of money laundering, and since it resembles legitimate trade, it is the hardest to detect by financial institutions and customs authorities. TBML largely involves giving false information on imports and exports through over/under-billing, multiple billing, over/under shipping, and quality misrepresentation. Compared to more conventional kinds of money laundering, TBML seems to be less understood by policymakers, yet its impact can have a significant effect on global trade and tax income. This policy brief, therefore, seeks to contribute to understanding the landscape of trade-based money laundering in Uganda.

Beneficial Ownership Laws in Uganda and the Role of Stakeholders

This fact sheet provides information on the legal and institutional framework governing beneficial ownership in Uganda and the role of different government agencies in the fight against illicit financial flows and related crimes in Uganda. Beneficial ownership is a cencept that refers to the ultimate ownership or control of a legal arrangement, entity or asset. It identifies the individual(s) referred to as beneficial owners who enjoy the benefits of ownership, such as profits and voting rights. According to Ugandan laws, a beneficial owner means a natural person or persons who exercises ultimate control over a company or a natural person on whose behalf a transaction is conducted in a company.

Beneficial Ownership Information Disclosure in Uganda

This fact sheet provides information relating to beneficial ownership disclosures in Uganda and the importance of such disclosures in the fight against illicit financial flows and related crimes in Uganda. Section 21 of the Companies (Amendment) Act, 2022 requires every registered entity/arrangement in Uganda to record their beneficial owner(s) in a beneficial ownership register. This register contains i) certain personal information of the beneficial owner(s) of the entity/arrangement, ii) the nature of ownership or control they have in the entity, and iii) the date they became or ceased to be beneficial owners. The law requires that notice of the creation of the register be given to the Registrar of Companies within 14 days.

Trade-Based Money Laundering: A Global Challenge

The report analyzes the numerous challenges of TBML from a global policy perspective. It describes TBML as “disguising the proceeds of crime [by] moving value through the use of (legitimate) trade transactions.” The report provides an in-depth analysis of the most common TBML methodologies namely: over- and under-invoicing of goods; misrepresentation of goods being shipped; multiple invoicing of goods; over- and under-shipment or phantom shipments; the black market peso exchange; and the use of informal value transfer systems. Mis-invoicing was the most common methodology, representing 63 percent of cases. The paper finds that this illicit activity poses complex problems for law enforcement while also undermining global development. The report concludes with an analysis of current policy efforts as well as recommendations for ways to bolster the fight against TBML going forward.

Corporate Transparency: A guide for beneficial ownership laws in Uganda

This paper is a contribution to legal reforms in Uganda that are intended to take care of beneficial ownership transparency. It seeks to tackle some of the questions that ought to be addressed in the course of streamlining beneficial ownership disclosure in Uganda. Globally, beneficial ownership transparency has emerged as a critical tool in identifying and stemming Illicit Financial Flows (IFFs) resulting from corruption, money laundering, terrorism financing and other financial crimes. Beneficial ownership transparency limits individuals from hiding behind shell companies to carry out illegal transaction that deny governments the necessary revenues to finance development programs.

OECD Global Tax Deal: Key Elements, Opportunities, and Challenges

The global tax deal represents a major reform to the rules governing the international tax system, aiming to bring an end to tax havens and profit-shifting by multinational enterprises. By introducing a global minimum tax rate and new profit reallocation rules, the deal aims to give countries a fairer chance to collect tax revenues from MNEs operating in or generating revenues from their jurisdictions. The deal was negotiated under the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in October 2021.

FAQs on beneficial ownership laws in Uganda

This infographic booklet contains frequently asked questions on beneficial ownership in Uganda.

Mini Documentaries

Trade-based money laundering in Uganda

Watch our mini-documentary on trade-based money laundering in Uganda which highlights the most common techniques used, vulnerable sectors, and its impact on Uganda and how to mitigate the risks.

Beneficial Ownership in Uganda

The mini-documentary on beneficial ownership highlights the need for disclosure of beneficial owners of companies to combat illicit financial flows in Uganda. It illustrates how increased transparency on beneficial ownership will help to combat tax evasion, corruption, money laundering through shell companies and fight terrorism financing in Uganda.

Gold Trade in Uganda

The mini-documentary show loses Uganda incurs on potential revenues from gold trade due to illicit financial flows and lack of transparency in the mining sector.

In the media

• How Illicit Financial Flows Threaten Uganda's Economic Growth
• Uganda Takes Aim at Trillion-Shilling IFF Drain with Innovative Tracker Tool
• Ugandan government agencies endorse the Anti-IFFs Policy Tracker to strengthen the fight against IFFs
• Tailoring illicit financial flows reporting for your audience
• Africa losing US$88 billion in illicit financial flows – Speaker Among
• How revenue leakages are stifling mining sector
• How to unchain Uganda, continental peers from global predators
• Money laundering: 'Uganda ready to be removed from grey list'
• Govt could start taxing loss-making businesses this year
• Legislators urged to address illicit financial flows in Africa
• Uganda loses Shs2 trillion in illicit financial flows
• How Uganda is combating illicit financial flows
• Curbing illicit finacial flows will increase domestic revenue
• Financial flows cost Uganda Shs2 trillion
• There’s more to illicit financial flows than corruption
• URA takes head-on the fight against illicit financial flows
• Vulnerabilities in URA’s way to rise tax revenue

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Tel: +256 (0) 312812150 Email: acode@acode-u.org

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