The Law

The Financial Intelligence Authority (FIA) is mandated under Section 17A (1) of the Anti-Terrorism Amendment Act of 2015 to freeze or seizing any funds or property where it’s satisfied that the said funds and property is intended for terrorism activities. Under Section 17A (2) of the Anti-Terrorism Amendment Act of 2015, its provided that where such is done then the Financial Intelligence Authority (FIA) is required to notify or inform the Director of Public Prosecutions (DPP) in any case not later than forty eight hours after the freezing. According to Section 17A(3) of the Act, after the DPP has received such information then an application has to be made to court by the DPP for an order freezing or seizing such funds or property and hence a court shall make determination expeditiously.

The Court is mandated under Regulation 18 of the Anti-Terrorism Regulations, S.I 120-1 to vary an order freezing or seizing the funds or property upon justification that:

Where the Financial Intelligence Authority (FIA) causes any freezing or seizing of funds or property, such order remains in place and in effect until the court makes as determination as provided under Regulation 15(1) of the Anti-Terrorism Regulations, S.I 120-1

THE DEVELOPMENT

The High Court of Uganda in the recent case of Uganda Women’s Network (UWONET) and Another Vs Financial Intelligence Authority (FIA) and Another Misc. Cause No. 23 of 2021 made a decision in regard to how the Financial Intelligence Authority (FIA) should exercise its power to freeze funds. In this case, the Applicants were disputing the action of the Financial Intelligence Authority and the entire procedure which wasn’t within the confines of the law.

Accordingly, the Financial Intelligence Authority made the freezing of the applicants’ bank accounts upon receiving intelligence reports from national security agencies that the applicants were involved in terrorism financing activities.

FIA however failed to provide evidence of this even when the court is mandated under Regulation 18(2) of the Anti-Terrorism Regulations to examine ex parte and in camera any security or intelligence reports or other information or evidence considered confidential by FIA, which were considered by FIA and which formed, in part or in whole, the basis for the seizing or freezing of the funds or property.

Court noted that Section 17A of the Anti-Terrorism Amendment Act, 2015 necessarily means that the Financial Intelligence Authority (FIA) must have information or look at circumstances leading to reasonable suspicion that the suspected party has engaged or is about to engage in terrorism activities.

In addition, there must be a proper basis for FIA’s actions i.e. freezing or seizing of funds or property and it must be in position to present that information or circumstances to court, if called upon, for court to there was genuine cause of its action.

In its judgment, court held that FIA committed an error or law when it exercised its mandate of freezing the Applicants’ accounts without evidence leading to its satisfaction that Applicants were financing terrorist activities and as such its actions were illegal, ultra vires and irregular.

CONCLUSION

An appeal against the above decision has been made and before the Court of Appeal decides otherwise, this will be the standing. The powers of the Financial Intelligence Authority (FIA) to freeze or seize funds or property have been directed to be used in circumstances where FIA has “reasonable” suspicion and where it can prove before court that its actions were justifiable.

DISCLAIMER: This article is for general information only and reflects the position at the date of publication. It does not constitute legal advice. For any further information or advice relating to this article, please contact us.