Legal issue

Whether the actions of the Financial Intelligence Authority (FIA) were lawful, judicious and in accordance with the rules of natural justice.

Ruling

The Court held that FIA did not present any evidence it had relied on to freeze the applicants’ bank accounts and yet it claimed to have received intelligence reports that the applicants were financing terrorist activities. It stated that when the matter was referred to the ODPP, the FIA was directed by the ODPP to unfreeze the applicants accounts, pending further investigations into the matter. The Court concluded that the ODPP found no credible evidence warranting freezing of the applicants’ accounts hence the reason it ordered for the unfreezing of the applicants’ bank accounts pending investigations. In the conclusion the Court found it in the interest of justice that the prerogative orders and judicial reliefs sought be granted to the applicants.

Reasoning of the Court

The Court reasoned the FIA must be satisfied that the funds or property were intended for terrorism activities before freezing the accounts; and in order for the FIA to reach this conclusion, it must have information or point to circumstances leading to reasonable suspicion that the suspected party has engaged or is about to engage in terrorism activities, as provided under Section 17A (1) of the Anti-Money Laundering Act. In the Court’s view, there must be a proper basis for the FIA’s actions and it must be in position to present that information or circumstances to court, if called upon, for the court to see that there was genuine cause for its action.

The FIA in exercising its statutory powers of fighting money laundering and combating terrorism financing directed the applicants’ bankers to freeze all the applicants’ bank accounts in accordance with Section 21(o) of the Anti-Money Laundering Act, 2013 and later on under Section 17 A (1) of the Anti -Terrorism (Amendment) Act, 2015. The applicants, dissatisfied with the manner in which the 1st respondent ordered for the freezing of their bank accounts filed an application for judicial review before the High Court. In the course of proceedings, the 1st respondent unfroze the Applicants’ bank accounts and claimed that this matter should be dismissed arguing that it had been overtaken by events. The applicants argued that such orders were without reasonable suspicion to warrant an investigation into the allegations of terrorism financing. They cited procedural impropriety following the FIA’s failure to inform the Office of the Director of Public prosecutions within the mandatory forty-eight hours after the time of freezing the bank accounts of the two organisations. They further argued that the continued failure and/or refusal by the FIA to act on the advice of the Office of the Director of Public Prosecutions (ODPP) to expeditiously act on the information provided; the letter dated 10th December, 2020 and as required under 45 Section 17A (3) of the Anti-Terrorism Amendment Act, 2015 was not only procedurally improper but also irrational.

Uganda Women’s Network and the Uganda National NGO Forum challenged the decision of November 2020 by the Financial Intelligence Authority (FIA), a government agency mandated to fight money laundering and combating terrorism financing. This application was brought under Article 42 of the Constitution and Sections 33 and 36 of the Judicature Act, 2009. During the proceedings the FIA unfroze the applicants accounts and requested the Court to dismiss the case having been overtaken by events. On 7 September 2022, the High Court handed down its judgment.

The power of the State to regulate or limit the enjoyment of freedom of association must be exercised reasonably.