Anti-money laundering measures…Guyana hopes to buy more time, as deadline elapses

Aug 28, 2013 News

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As worry continues to mount over possible sanctions by the international community if certain measures are not taken to fight money laundering locally, Guyana has submitted a report to the Caribbean Financial Action Task Force (CFATF) which it hopes will buy the country more time.
Minister of Legal Affairs and Attorney General Anil Nandlall, yesterday said that the report speaks of other measures that are being implemented in the meantime.

The legislation, Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill 2013 (AML/CFT), was presented to the National Assembly for passage earlier this year, but the Opposition asked for more time to study the them and sent the matter to a Parliamentary Select Committee.
Guyana, in a last-ditch effort to avert sanctions, sent Nandlall, and Paul Geer, head of the Financial Intelligence Unit (FIU), the entity which is tasked locally with investigating money crimes, to Nicaragua to ask a review panel for an extension. An extension was granted.
Guyana’s situation is set to be reviewed in November, but a progress report was given a deadline of Monday, August 26.
“We are proceeding to implement the non-legislative part of the recommendations that are outside of those Parliamentary Bills. We are working to pass the Bills by November. I will be addressing the matter later this week also,” the AG told Kaieteur News last evening.
This was what was also essentially conveyed to CFATF in the report for the August 26 deadline.
Sanctions by the international community could see money transfers and other remittances and even trade severely affected. Institutions like the banks, insurance companies, cambios, pawnbrokers, credit cooperatives and money transfer agencies are among those likely to feel the squeeze.
The Parliamentary Bills were targeting the deficiencies that currently exist in the laws.
Last month, one of the country’s biggest banks, the Guyana Bank for Trade and Industry (GBTI) warned of the implications of not adhering.
“This has very serious implications for our banks, by extension our customers who make and receive international payments,” GBTI’s Chairman, Robin Stoby, S.C., said in his half-yearly report.
CFATF, in late May, also made it clear that the issue was a serious one.

 

Warnings
“If Guyana does not take specific steps by November 2013, then the CFATF will identify Guyana as not taking sufficient steps to address its AML/CFT deficiencies and will take the additional steps of calling upon its members to consider implementing counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana, and at that time CFATF will consider referring Guyana to the Financial Action Task Force International Cooperation Review Group (FATF ICRG),” the regional body said.
According to the CFATF, in November 2011, the body brought to the attention of its member states, including Guyana, that there were significant strategic deficiencies in their AML/CFT regime.
“With a view to encouraging expeditious rectification of the identified strategic deficiencies, the CFATF, in conjunction with Guyana, developed an action plan with identified target dates to address the strategic deficiencies that existed in its national architecture to combat money laundering and the financing of terrorism.”
CFATF acknowledged that Guyana took steps towards improving its AML/CFT compliance regime, including strengthening its record-keeping requirements and functionality of its Financial Intelligence Unit, but urged that the legislation be passed.
CFATF is an organisation of 29 states of the Caribbean Basin which have agreed to implement common countermeasures to address the problem of criminal money laundering. It was established as the result of meetings convened in Aruba in May 1990 and Jamaica in November 1992.
The amendment to the law is designed to force better record-keeping of financial transactions, to flag suspicious activities. It will also strengthen the capacity of countries to prosecute and even seize assets that are proceeds of illegal activities, including drugs and arms smuggling.
CFATF and other similar agencies believe that by targeting the money trail, it would hamper drug trafficking and other illegal activities.
Guyana has not made any notable arrests for money laundering or seen any major seizures of assets that came from money laundering activities.
So far, financial institutions have implemented measures like demanding in some cases that its clients produce two forms of identifications.

 

Guidelines
Already, Bank of Guyana has developed guidelines for the various financial institutions.
Among other things, the businesses may be called upon by the Central Bank to demonstrate compliance.
Essentially, the companies will have to take steps to know its customers and take steps otherwise to establish the identities of the parties wishing to create a relationship.
Training programmes and the appointment of a compliance officer are recommended in the guidelines.
According to General Manager of GTM Group of Companies, Roger Yee, his company has already since earlier this year, appointed a compliance officer who is ensuring that systems are in place to deal with the requirements.
Under the laws, transactions above a certain amount would automatically trigger red flags and these have to be reported to the Bank of Guyana. Financial institutions will be mandated to ascertain the origin of funds when transactions are above a certain amount.
For the insurance companies, it is over $1M annually. At the banks, transactions over $500,000 daily would be flagged and have to be reported.
No longer would insurance companies be allowed, when the new laws come, to accept vague descriptions of source of wealth as “savings”, “investments”, “inheritance” and “business dealings”. In the case of remittances, the senders’ identities have to be ascertained, failing which the  transaction cannot be completed. Suspicious transactions have to be reported to the FIU which under the laws will be given even more sweeping power of investigations.

 

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