FINANCIAL INTELLIGENCE AUTHORITY HAS NO POWERS TO ORDER THE FREEZING OF BANK ACCOUNTS

The High Court in Kampala has ruled that the Financial Intelligence Authority (FIA) has no powers to order the freezing of bank accounts of individuals or organisations suspected to be involved in terrorism  financing.

The ruling comes on the heels of an order by FIA issued in November 2020, and directed to banks to freeze all accounts belonging to two non-governmental organisations- the Uganda Women’s Network and the Uganda National NGO Forum.

Justice Esta Nambayo in her ruling held that it was irregular for FIA to freeze the bank accounts of the NGOs on mere suspicion that they financed terrorism activities.

“In this case, therefore, I would find that the 1st respondent (FIA) committed an error of the law when it exercised its mandate of freezing the applicants’ accounts without evidence leading to its satisfaction that the applicants were financing terrorist activities; and as such, its actions were illegal, ultra vires and irregular,” Justice Nambayo ruled.


“It is hereby declared that the decision by the 1st respondent  (FIA) directing the applicants’ bankers to freeze, restrict or halt all withdraws or debits from the applicants’ bank accounts was without reasonable suspicion to warrant an investigation into the allegations of terrorism financing,” Justice Nambayo stated.

the Judge said that there must be a “proper basis” or “reasonable suspicion” before the FIA orders the freezing of bank accounts and that the FIA must be in a position to present that information or circumstances to court in evidence -, if called upon, for court to see that there was genuine cause for its actions which the agency did not do. She order FIA to pay costs.

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