‘Use Competition Bill to fight pyramid schemes’
The Financial Intelligence Authority (FIA) has advised government to use the Competition Bill, 2022 currently under Parliamentary scrutiny to fight pyramid schemes.
According to the officials from FIA, a government agency mandated to monitor, investigate and prevent money laundering in the country must be ridden off.
“The current Competition Bill, 2022 should include clear provisions for multi-level marketing and also prohibit pyramid schemes which focus on profit from recruitment of participants instead of profits from the sale of products or services,” Esther Kagira, Manager, Strategic Analysis, FIA said.
Kagira and a technical team from FIA were on Tuesday, 24 January 2023 appearing before the Committee on Tourism, Trade, and Industry to present their views on the Competition Bill.
Kagira said Uganda has been grappling with business ventures with elements of anti-competition such as the AIM Global Pyramid Scheme, D9 Cube, BLQ Football and Development Channel, which have fleeced off people.
“In my view, such business practices should be criminalised under the proposed bill,” she said.
Trade Committee Chairperson, Hon. Mwine Mpaka inquired why FIA has not frozen the bank accounts of the 14 companies involved in pyramid business as recommended by Parliament in 2018.
In 2018, Parliament adopted a motion by Mpaka, who was then a Youth Representative for Western region urging government to ban all ponzi and pyramid schemes.
“Some time ago, Parliament adopted a motion to ban these companies and have their accounts frozen and indeed FIA gave us a list of these schemes but you have not closed or frozen their accounts and have the monies recovered,” Mpaka said.
FIA’s Senior Legal Officer, Margaret Nabukeera said the financial authority has certain procedures to be followed before freezing such accounts but was quick to add that one of the companies identified as D9 has been acted upon.
Hon. Rita Atukwasa (Indep., Mbarara City) proposed that the bill should be enhanced to also regulate crypto currency businesses such as Bitcoin, Zipcoin and Namecoin whose business operations are obscure and cannot be tracked.
In their submission, FIA proposes a clear articulation of the relationship between the Competition Bill, 2022, and the Anti-Money Laundering Act, 2013 as well as the industrial and intellectual property laws among others.
They also want the bill to ensure that there is competition among business entities that buy agricultural products since more than 70 per cent of Uganda's population depends on agriculture.
The object of the Competition Bill, 2022 is to promote and sustain fair competition in markets and prevent practices that adversely affect competition in markets in Uganda.