The Financial Intelligence Authority has strongly urged non-governmental organisations (NGOs) to enhance their safeguards against money laundering and terrorism financing.
Authorities emphasised that these measures are crucial to prevent malicious actors from exploiting NGO channels to destabilize the country, thereby ensuring the security and stability of the nation.
While speaking during the summit dubbed Talk to your Regulator at Serena Hotel in Kampala this week, the deputy head of the Financial Intelligence Authority Lazurus Mukasa explained that from the studies that were made recently although the risk rates in the sector remain low, there have been attempts noted to send illegal funds to an NGO.
While it was acknowledged that NGOs broadly face a low risk of terrorism financing, Mukasa alluded that specific categories were highlighted as being at a higher risk. “NGOs involved in certain sectors, such as Operation Madarasa and crime awareness initiatives in areas plagued by insecurity, are particularly vulnerable,” he noted.
He added that these organizations, due to their operational environments and the nature of their work, may be more susceptible to infiltration by bad elements seeking to use their resources for illicit purposes.
Development partners echoed this sentiment and urged government authorities regulating the NGO sector to foster dialogue and view these organizations as partners in development.
Alicia Van Den Boom, the head of cooperation at the German Embassy, emphasized that regulatory bodies should not solely focus on implementing laws but should also engage in constructive dialogue with NGOs. “Regulators such as the Uganda Registration Services Bureau, the National NGO Bureau, the Financial Intelligence Authority, and the Uganda Revenue Authority should prioritize dialogue to ensure compliance and collaboration,” Van Den Boom stated.
This approach, she argued, would not only enhance compliance but also strengthen the partnership between the government and NGOs, facilitating a more effective and unified effort in promoting national security and development.
“Civil Societies are very important but then why don’t they comply with the law? I have spent 10 years studying law and working in legal practices, and I have discovered NGOs full of people who are not aware of certain laws and cannot understand them, so to ensure healthy relationships, they need to be helped. Also trust from both sides must be a very important key,” she said.
Meanwhile, a report launched at the summit highlighted a continued lack of trust between Non-Governmental Organizations (NGOs) and regulators, with stakeholders emphasising the need to address this challenge.
These findings were shared at this year’s “Talk to Your Regulator” symposium, which brought together civil society leaders and officials from the National NGO Bureau, the Financial Intelligence Authority, KCCA, the Uganda Registration Services Bureau, and the Uganda Revenue Authority. The report, titled “Cultivating Trust to Improve NGO Sector Governance in Uganda,” underscored the prevalent distrust.
Dr James Nkuubi, Executive Director at the Network for Public Interest Litigation, who presented the report, indicated that there is deep scepticism between regulators and NGO players regarding each other’s activities.
“We discovered that NGOs are increasingly doing what the regulators need and this is bringing both parties to work hand in hand but then also we found out misgivings or concerns forexample NGOs complained about the Financial Intelligence Authority because does not give feedback even when they file, some people believe they are being targeted. In a nutshell, we are looking towards building trust and improving NGO sector governance,” he said.
Yona Wanjala, the Executive Director of Defenders Protection Initiative who is the convener of the symposium says that the findings point to the need for continuous dialogue between the Government and NGOs. “There is trust but it has been positioned in an environment with alot of thorns and this alone makes it unhealthy trust, so what we want to rekindle is a healthy trust but this requires a united effort, the regulators and NGOs each party must know its roles to play.”
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