KAMPALA – The National Non-Profit Organizations (NPOs) in Uganda are celebrating a major victory after the Parliament of Uganda approved an amendment to the Anti-Money Laundering Act, 2022, removing them from the list of accountable persons in the fight against money laundering.
“We are thrilled and grateful to the government for this landmark decision.” “This amendment is a testament to the government’s commitment to creating an enabling environment for NPOs to operate effectively.”
The amendment, which was approved on January 23, 2025, is the result of years of collective advocacy efforts by NPOs, led by the Defenders’ Protection Initiative (DPI) and the National NPO Group on FATF. The advocacy efforts included comprehensive research, policy briefs, and strategic engagement with various governmental agencies at national, regional, and global levels.
“We commend the government for recognizing the critical role that NPOs play in Uganda’s socio-economic development,” they said in a statement. “This decision will enable us to focus on our core work of serving the most vulnerable populations in Uganda, without the undue burden of excessive regulatory scrutiny.”
The removal of NPOs from the list of accountable persons means that they will no longer be subject to the same level of reporting obligations as other entities. Instead, Uganda will adopt a risk-based approach in addressing terrorism financing related to NPOs, focusing on high-risk organizations.
“We welcome this risk-based approach, which acknowledges that NPOs are not inherently high-risk entities. We are committed to working closely with the Financial Intelligence Authority (FIA) and the NGO Bureau to combat money laundering and terrorism financing risks.”
The amendment has several implications for NPOs in Uganda. Firstly, it acknowledges the crucial contribution of NPOs to national development and paves the way for a more supportive regulatory framework. Secondly, it transitions Uganda to a risk-based approach in addressing terrorism financing related to NPOs, concentrating on high-risk organizations. Finally, it relieves NPOs from undue reporting obligations, allowing them to focus on their vital work without excessive regulatory scrutiny.
The National NPO Working Group on FATF has pledged to continue working with the government to ensure that the amendment is implemented effectively. The Group has also called upon the Minister of Finance, Planning and Economic Development to expedite the issuance of the relevant statutory instrument to implement the amendment.
Furthermore, the Group has called upon the Financial Intelligence Authority (FIA) to formally notify all NPOs that they are no longer required to file reports, submit returns, or fulfill other obligations previously imposed on accountable persons. The Group has also urged the relevant law enforcement agencies to promote independent, objective, and ethical information gathering and impartial investigation of terrorism financing, within the available policy and legal framework.
In addition, the National NGO Bureau of Uganda has been urged to undertake a comprehensive reflection into the NPO sector, with a view to identifying specific organizations that meet the Financial Action Task Force (FATF) definition of Non-Profit Organizations (NPOs). The Bureau will also conduct a comprehensive risk assessment of these identified NPOs, focusing on understanding the nature of potential terrorist financing risks that may be associated with them.
The National NPO Group on FATF has also pledged to continue working closely with the FIA and the NGO Bureau to combat money laundering and terrorism financing risks. The Group will disseminate and promote the FATF Best Practices Paper on Combating the Abuse of Non-Profit Organisations to all relevant NPO sector regulators, with the aim of ensuring effective implementation of the risk-based approach for improved oversight over the NPO sector in matters related to counter-terrorism financing.
“We are grateful to the government for this significant step forward. We look forward to continuing our collaboration with the government to ensure that NPOs can operate effectively and efficiently, without undue regulatory burden.”
The amendment is a significant victory for NPOs in Uganda, and its implementation is expected to have a positive impact on the country’s socio-economic development.
“This decision is a testament to the power of collective advocacy and collaboration between NPOs and the government. We are proud to be part of this journey towards creating a more enabling environment for NPOs in Uganda.”
The National NPO Working Group on FATF has extended its heartfelt gratitude to the Honorable Minister of Finance, Planning and Economic Development for spearheading the motion, the Uganda Parliament for approving the motion, the Financial Intelligence Authority, and the National NGO Bureau for conducting the 2023 Risk Assessment, which served as a foundation for this milestone achievement.
The Group has also thanked the East and Southern Africa Anti-Money Laundering Group for its supportive role in improving Uganda’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/C.
