MPs Urge Government to Ease 'Politically Exposed Person' Banking Restrictions

Members of Parliament in Uganda have expressed strong concerns regarding the banking sector’s classification of legislators and former officials as ‘Politically Exposed Persons’ (PEPs). This designation, they argue, imposes undue restrictions that impede access to credit and the establishment of entities like Non-Governmental Organizations (NGOs).

During a plenary session, the Deputy Speaker, Thomas Tayebwa, tasked the Attorney General to address the issue. In response, the Deputy Attorney General, Jackson Kafuuzi, explained that Uganda adheres to international standards set by the Financial Action Task Force (FATF) in defining PEPs. These include individuals entrusted with prominent public functions, such as senior politicians, government officials, and judicial or military officers.

Kafuuzi noted that there are no fixed legal timelines for an individual to cease being considered a PEP, and that Uganda employs a risk-based approach, considering factors like the seniority of their past role, recency of leaving office, and ongoing influence.

However, MPs like Hon. Paul Mwiru decried the label as discriminatory, stating that it unfairly associates them with corruption despite their legitimate earnings and tax compliance. “Being a politically exposed person does not mean that I am a thief,” Mwiru asserted, calling for legal amendments.

Other legislators highlighted practical difficulties. Hon. Samuel Acuti pointed out that banks often require lengthy investigations, such as an Inspector General of Government (IGG) report, for PEPs to open accounts, leading to delays and restrictions.

Deputy Speaker Tayebwa advocated for a standardized approach across financial institutions and suggested a potential five-year period after leaving office before an individual is no longer considered a PEP, coupled with compliance certificates from relevant authorities. He emphasized the need to improve Uganda’s international image, which has been tarnished by perceptions linked to corruption.

Source: Parliament of Uganda