The Role of Anti-money Laundering Preventive Strategies in Enhancing the Fight Against Money Laundering: A Case of Selected Financial Institutions in the Central Business District of Kampala

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Date
2024-06-12
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Uganda Christian University
Abstract
The study aimed at establishing the role of anti-money laundering preventive strategies in enhancing the fight against money laundering. The objectives of the study were, to investigate how client due diligence affects money laundering in selected financial institutions in Uganda; to analyze how legislation influences money laundering in selected financial institutions in Uganda, and to identify the preventive measures of combating money laundering in financial institutions in Uganda. The case study research design and a qualitative approach was adopted for the current study. Unstructured interviews, document reviews and open-ended questionnaires were used for data collection, and a sample size of 32 respondents from selected financial institutions in Uganda was involved in the study. The current study revealed that for any company or financial institution to successfully prevent money laundering, appropriate due diligence processes must be put in place. The study further revealed that the legal foundation for combating and avoiding financial crimes is provided by legislation, which is the fundamental component of anti-money laundering initiatives. AML laws that are effective build an extensive structure that includes rules, obligations, and enforcement techniques, ultimately resulting in a more transparent and secure financial system. Finally, the study revealed that Organisations must take proactive steps to prevent money laundering if they want to avoid unintentionally getting involved in unlawful financial activity. These steps lessen the possibility of legal trouble and reputational harm while ensuring that one complies with anti-money laundering (also known as AML) laws and rules. The study concludes that customer due diligence aids organizations in better understanding their clients, evaluating risks, and spotting irregularities. States, insurance companies, and businesses can combat money laundering and safeguard the integrity of the financial system by putting these preventive measures into place and continuously improving them, which will ultimately lead to a safer and more open global economy. The study further concludes that, legislation is a key component of the global campaign to stop money laundering. It establishes the legal framework, requires the required compliance procedures, and imposes fines. Similarly, regarding the third objective of the study, the current study concludes that to keep the financial system's integrity and stop criminal organisations from profiting from their unlawful activities, financial institutions, companies, and governments must cooperate. The study recommends that financial institution should embrace Customer Due D because it is more than just a matter of complying with regulations. It is a vital instrument for preventing financial crime, preserving reputation, and preserving customer trust while allowing institutions to maneuver the intricate web of international finance and rules. The current study further recommends that government create laws that make use of technology to stop and identify money laundering. Use data analytics and AI-driven algorithms to find patterns and anomalies in massive datasets. Finally, the current study recommends that given that money laundering is a worldwide problem that cuts beyond national boundaries, international collaboration should be embraced by financial institutions.
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