Each year, the Ugandan economy loses over UGX 2 trillion (US$550 million) in illicit financial flows (IFFs), including corruption, money laundering, organized crime, trade misinvoicing, and tax evasion. The recurrent theme across all these sources of illicit money is that criminals and corrupt government officials use companies and other types of legal entities as vehicles to mask their identity and hide their ill-gotten gains both in Uganda and across the financial centres of the world.
The lack of information on company ownership handicaps the Ugandan government’s ability to successfully track these criminal actors and recover valuable tax revenue. This concept of identifying the individual that truly owns, controls and economically benefits from a company or legal entity is termed ‘beneficial ownership’ (BO) transparency. Globally, beneficial ownership transparency has emerged as a critical tool to unmask criminals and curb the use of anonymous companies as vehicles for illicit activity.
In this report, GFI and ACODE examine a series of case examples where Ugandan and other African government officials used shell companies and offshore trusts to stash and hide their wealth to demonstrate how the failure to collect beneficial ownership information is frequently exploited by individuals looking for a convenient way to move illicit proceeds and hide their criminal activity. Using these case studies, in addition to benchmarking examples from beneficial ownership legislation in other African countries, this report provides a guide for the implementation of a strong beneficial ownership law in the Ugandan context.