AML Compliance in Precious Metals: FATF Requirements Explained

## Introduction

Uganda has emerged as East Africa's premier gold trading hub, with exports growing from virtually zero in 2010 to over $2.5 billion annually by 2024. For institutional buyers, understanding the regulatory framework is essential for successful procurement.

This comprehensive guide covers everything you need to know about exporting gold from Uganda in 2026.

Regulatory Framework

Primary Legislation

Mining Act, 2003 (Cap 152) governs all mineral operations: - Section 4: Vests all mineral rights in the Government - Section 38-45: Regulates mineral dealing and export - Section 89: Prescribes offenses and penalties

Mining Regulations, 2008 (S.I. 42-1) provides operational details: - Part VII: Mineral dealing licenses - Part VIII: Export procedures and documentation - Part IX: Royalty and fee structures

Anti-Money Laundering Act, 2013 establishes AML/CFT requirements: - Customer due diligence obligations - Record-keeping (minimum 7 years) - Suspicious transaction reporting

Key Regulatory Bodies

Directorate of Geological Survey and Mines (DGSM) - Primary mining sector regulator - Issues mineral rights and export licenses - Conducts compliance audits - Contact: +256-414-250-442 | info@dgsm.go.ug

Uganda Revenue Authority (URA) - Tax collection and customs clearance - Collects export duties (3% of FOB value) - Issues tax compliance certificates - Contact: +256-414-351-000 | info@ura.go.ug

Financial Intelligence Authority (FIA) - AML/CFT oversight - Receives suspicious transaction reports - Contact: +256-414-347-344 | info@fia.go.ug

Export Licensing Requirements

License Types

1. Mineral Dealer's License - Required for domestic purchase and aggregation - Validity: 1 year (renewable) - Fee: UGX 5,000,000 (~$1,350) - Requirements: Business registration, TIN, physical premises, minimum share capital UGX 500M

2. Mineral Exporter's License - Required for export of minerals - Validity: 1 year (renewable) - Fee: UGX 10,000,000 (~$2,700) - Requirements: Dealer's License, export contracts, bank guarantee, AML compliance program

3. ICGLR Regional Certification - Required for all gold exports - Validity: Per shipment - Fee: 0.5% of FOB value (minimum $500) - Ensures conflict-free status

Application Process

Step 1: Company Registration (3-5 days) 1. Reserve company name with URSB 2. Submit incorporation documents 3. Receive Certificate of Incorporation 4. Cost: ~UGX 100,000 (~$27)

Step 2: Tax Registration (1-2 days) 1. Apply for TIN with URA 2. Register for VAT (if applicable) 3. Obtain tax compliance certificate 4. Cost: Free

Step 3: DGSM License Application (21-30 days) 1. Complete DGSM application forms 2. Submit supporting documents 3. DGSM premises inspection 4. License issuance upon approval

Step 4: ICGLR Registration (14-21 days) 1. Register with DGSM as ICGLR focal point 2. Submit supply chain due diligence policy 3. Undergo third-party audit 4. Receive ICGLR certificate number

Compliance & Due Diligence

OECD Due Diligence Framework

The OECD Due Diligence Guidance (5th Edition) is the international standard:

Step 1: Establish strong company management systems - Adopt supply chain policy - Structure internal management - Establish controls and transparency - Strengthen supplier engagement - Establish grievance mechanism

Step 2: Identify and assess risks - Map the supply chain - Assess points of risk - Conduct on-site due diligence - Document findings

Step 3: Design and implement risk response strategy - Report findings to senior management - Adopt risk mitigation measures - Monitor and track performance

Step 4: Carry out independent third-party audit

Step 5: Report annually on supply chain due diligence

Red Flags to Watch For

Geographic Red Flags: - Gold from conflict-affected areas - Regions with armed groups - Areas with documented human rights abuses - Jurisdictions under sanctions

Supplier Red Flags: - Unwillingness to provide supply chain information - Inconsistent documentation - Unusual payment arrangements - Reluctance to allow site visits

Transaction Red Flags: - Prices significantly above/below market - Unusual shipping routes - Requests to misrepresent origin - Pressure to expedite without documentation

Export Procedures: Step-by-Step

Pre-Export Phase (T-30 to T-7 days)

T-30: Buyer Verification - Complete KYC on foreign buyer - Verify buyer's import license - Confirm payment method - Execute sales agreement

T-21: Gold Sourcing & Aggregation - Purchase from verified suppliers - Conduct XRF analysis - Document chain of custody - Store in approved facility

T-14: Pre-Shipment Assay - Submit samples to certified lab - Obtain assay certificate - Prepare commercial invoice - Approved labs: UNBS, AGR, Intertek, SGS

T-7: Export Documentation - Apply for DGSM export permit - Obtain ICGLR certificate - Prepare customs declaration - Arrange cargo insurance

Export Execution (T-5 to T-0)

T-5: Tax Clearance - Calculate export duty (3% FOB) - Pay at URA - Obtain tax clearance certificate

T-2: Physical Export - Arrange secure transport to Entebbe Airport - Present documentation to customs - Undergo physical inspection - Obtain customs release

T-0: Loading & Departure - Load cargo under customs supervision - Obtain airway bill - Receive export certification - Confirm shipment departure

Post-Export (T+1 to T+30)

T+1: Documentation Transmission - Send originals via secure courier - Provide encrypted electronic copies - Confirm receipt with buyer

T+3 to T+10: Payment Settlement - Receive payment per agreed terms - Issue receipt - Record in compliance system

T+30: Regulatory Reporting - Submit export statistics to DGSM - File Foreign Currency Retention form - Update ICGLR database - Include in quarterly AML report

Taxation & Fees

Export Taxes

| Tax Type | Rate | Basis | Payment | |----------|------|-------|---------| | Export Duty | 3% | FOB value | Before customs release | | VAT | 18% | Services only | Zero-rated for exports | | Corporate Tax | 30% | Annual profits | Quarterly installments |

Regulatory Fees

| Fee | Amount | Frequency | |-----|--------|-----------| | Exporter's License | UGX 10M (~$2,700) | Annual | | ICGLR Certification | 0.5% FOB (min $500) | Per shipment | | DGSM Export Permit | UGX 500K (~$135) | Per shipment | | Certificate of Origin | UGX 100K (~$27) | Per shipment | | Customs Processing | UGX 50K (~$13) | Per shipment | | UNBS Assay | UGX 350K (~$95) | Per batch |

Total Cost Breakdown ($1M Shipment Example)

| Component | Amount | % of FOB | |-----------|--------|----------| | Export Duty (3%) | $30,000 | 3.00% | | ICGLR (0.5%) | $5,000 | 0.50% | | Regulatory Fees | $300 | 0.03% | | Security & Transport | $1,200 | 0.12% | | Insurance (0.2%) | $2,000 | 0.20% | | Professional Services | $1,500 | 0.15% | | Bank Charges | $300 | 0.03% | | Total | $40,300 | 4.03% |

Payment Methods

Wire Transfer (Most Common) - **Process**: Buyer initiates wire → Funds clear in 1-3 days → Seller confirms - **Cost**: $100-275 total (sending + correspondent + receiving fees) - **Best For**: Established relationships, transactions under $5M

Letter of Credit (For New Relationships) - **Process**: Buyer opens LC → Seller ships → Documents presented → Bank pays - **Cost**: 0.5-1.5% annualized + confirmation fees - **Best For**: New customers, transactions over $2M

Escrow Service - **Process**: Funds held by third party → Goods delivered → Funds released - **Cost**: 0.5-2% of transaction value - **Best For**: Medium transactions ($500K-$5M), new relationships

Key Takeaways

1. Licensing is mandatory: Exporter's License + ICGLR Certification required 2. Timeline: 21-30 days for licensing, 7-14 days per shipment 3. Total cost: ~4% of FOB value (taxes, fees, logistics, insurance) 4. Compliance: OECD Due Diligence Framework is the standard 5. Payment: Wire transfer most common, LC for new relationships

Next Steps

Ready to export gold from Uganda? Contact our compliance team at compliance@nilepreciousmetals.com for: - License application assistance - Export procedure guidance - KYC documentation review - Shipment coordination

We respond to all inquiries within 4 business hours.