Africa-Press – Uganda. Uganda has been removed from the European Union’s list of high-risk jurisdictions for money laundering and terrorist financing, following approval by the European Parliament in Brussels.
The delisting, part of a revised list proposed by the European Commission, also removed Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and the United Arab Emirates.
At the same time, ten countries, including Kenya, Algeria, Angola, Côte d’Ivoire, and Lebanon, were added to the EU high-risk category due to “strategic deficiencies” in their anti-money-laundering (AML) and counter-terrorist financing (CFT) regimes.
“Parliament has decided to accept an update of the EU list of money-laundering and terrorist financing high-risk third countries,” the official statement said.
The update takes effect immediately following majority support in the European Parliament.
Uganda’s removal is expected to ease pressure on banks and businesses, which previously faced enhanced scrutiny from European counterparts.
High-risk jurisdictions are subject to stricter due diligence requirements, often leading to higher transaction costs, payment delays, and increased compliance obligations for companies engaged in cross-border trade.
Research by the Bank of Uganda indicates that being on the EU “grey list” typically leads to a drop in capital inflows averaging 7.6 percent of GDP.
For Uganda, the designation led to a sharp decline in foreign direct investment and higher costs of doing business, as local banks passed on additional compliance burdens to customers.
Creditworthiness was also affected, with lenders charging higher risk premiums for international financing.
Legal and Institutional Reforms
Uganda’s removal reflects significant reforms undertaken since being placed under increased monitoring in 2020.
Key measures include:
Enactment of the Companies (Amendment) Act 2022 and the Partnership (Amendment) Act 2022, requiring entities to maintain registers of beneficial owners.
Penalties of up to Shs500,000 per day for corporate officers failing to disclose beneficial ownership.
Strengthened powers for the Financial Intelligence Authority to oversee NGOs and charities.
Amendments to the Anti-Money Laundering Act, Companies Act, and Trustees Incorporation Act, enhancing disclosure requirements and enforcement.
These measures were aimed at aligning Uganda’s legal and regulatory framework with international AML/CFT standards and rebuilding confidence among global investors and correspondent banks.
Uganda’s delisting comes as neighbouring Kenya was added to the EU high-risk list, highlighting varying compliance outcomes within East Africa.
EU authorities emphasized that monitoring of Uganda will continue, and the country’s next international mutual evaluation is scheduled for 2028.
Experts say sustaining enforcement and ensuring full implementation of reforms will be critical for Uganda to maintain investor confidence and secure continued access to global financial markets.
