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Savings and credit co-operative societies (SACCOs) in the regions of Ankole and Kigezi, among others, have been urged to ensure compliance with the Financial Intelligence Authority (FIA) requirements to avoid heavy penalties.

Savings and credit co-operative societies (SACCOs) in regions such as Ankole and Kigezi have been advised to adhere to the Financial Intelligence Authority (FIA) regulations to prevent facing significant penalties.

FIA director of compliance and Training, Ester Aikiriza Kagira, says the strategy will help counter money laundering, terrorist financing and proliferation financing.

The SACCOs were also asked to conduct customer due diligence and establish risk management and compliance programmes in all their SACCOs. Aikiriza was on wednsday, December 18^th, 2024, addressing SACCO leaders from Ankole and Kigezi who attended a workshop at Silver Back Hotel in Mbarara city.

Aikiriza said the training followed a risk assessment, which found that SACCOS are among the risk areas where they need to engage and ensure they are not used for financial crimes. 

“We expect them to register and report any suspicious transaction or activity to the financial intelligence authority and be part of us in the fight against financial crimes,” Aikiriza added.

She noted that SACCOs are accountable according to the Anti-Money Laundering Act and warned that they (SACCOs) risk facing heavy penalties if they fail to register. She informed them that registration with FIA is free of charge and failure to register one faces a penalty of sh10m.

FIA training and outreach manager, Phiona Nabagala, said there are sanctions in the law for whoever breaches any compliance obligations like failure to register or report suspicious transactions, failure to report a large report like any amount that is equivalent to sh20m and above, and failure to re-monitor the transactions of their clients and source of funds for their customers.

Sheilla Murungi from the Uganda Microfinance Regulatory Authority, said they have conducted similar awareness engagements across the country meeting SACCOs to enhance awareness and enable SACCOs to understand matters related to money laundering and encourage them to comply with the Anti-money Laundering Act. The Act was established to combat money laundering and terrorist financing in Uganda.

She asked them to support the authorities that were put in place to protect the financial sector from being abused by criminals seeking to launder proceeds of crime or fund terrorist activities.

Wilber Mugum, the general manager of Kiruhura Epicentre SACCO, detected challenges where people will fear to take their money to SACCOs saying the law gives them a hard time, especially if SACCOs start asking them about sources of their money and how they spend it, members will start fearing to save money in SACCO and resort to start keeping money in their houses.