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In this legal alert we analyse the High Court’s ruling on the limits of the Financial Intelligence Authority’s (FIA) powers to freeze bank accounts under Uganda’s Anti-Money Laundering Act. The Court held that while the FIA may freeze accounts on suspicion of money laundering, it must rely on reasonable, demonstrable evidence and promptly seek judicial approval to continue the freeze. It found the FIA acted illegally and procedurally improperly in maintaining a prolonged freeze without evidence or court sanction, emphasising the need for due process, proportionality, and timely judicial oversight to protect property and fair hearing rights.
13 April 26
Other Insights:
In a judicial review application brought on behalf of a MMAKS Advocates client, BMS General Trading, against the Financial Intelligence Authority (“FIA”) (Uganda’s Financial Intelligence Unit) and the Attorney General, the High Court of Uganda (Civil Division, Teko J.) has clarified the due process limits to the FIA’s power to issue directives for the freezing of bank accounts based on Uganda’s Anti Money Laundering statute.
The Court has held that while the FIA has power to freeze bank accounts based on suspected anti money laundering activity, it must do so based on objective material (evidence) that is demonstrable and sufficiently reasonable and that the FIA must thereafter promptly seek a court order sanctioning the continuation of the freeze, thereby ensuring judicial oversight.
Within the judicial proceedings to sanction the continuation of the freeze, the affected party has an opportunity to be heard. While the ruling does not specify the exact period within which the FIA must seek the courts’ sanction for the continuation of its freezing directive, the reference to prompt action implies that this must be done without any undue delay. The ruling is commendable for articulating procedural limits on the FIA’s sweeping authority.
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Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Isaac Walukagga or Hussein D. Gulam