A BAD MOVE AT CHRISTMAS TIME

Dec 23, 2010 Features / Columnists, Peeping Tom

The robbery of a man on Tuesday, last, soon after he left a bank, should remind the authorities about the lack of absolute secrecy when undertaking financial transactions, and about the inherent dangers of persons who undertake financial transactions whether at banks or at cambios.
A few weeks ago, the government instituted regulations requiring persons changing more than US$100 to produce identification and an address. This is an unreasonable demand because money laundering is not going to take place through the cambios and more so, is not going to involve transactions involving sums below US$10,000. The average person does not go into a cambio and change US$10,000. That simply does not happen.
This is why it makes no sense for the government to be demanding that persons wanting to change under US$100 to produce identification and an address. This is small change compared to the sums that are usually involved in money laundering.
So why do the authorities want to monitor small transactions when the bulk of these transactions are legitimate? Do the authorities have the administrative capacity to monitor all these minor transactions?
Certainly not! So what, then, is the real reason behind the recent regulations?
Members of the public have been complying with the requests but many of them have been caught off- guard since they are not accustomed to walking with ID cards when changing currency. This has caused great inconvenience to many persons who have had to undertake the additional risk of traveling back home with their currency just to uplift their ID cards to return to the cambio or bank.
The timing of the regulation is another problem. It comes at the time most families receive some assistance from overseas. There is hardly a family in Guyana who does not benefit at this time from remittances from abroad. So at this time there is great confusion being caused by persons not having their ID cards.
The authorities, at least, should have given some advance notice of the regulation, consulted widely on its implementation and work towards a introduction, if it was deemed necessary, at a time other than Christmas. This is not the right time for some regulations.
It is predicted that the new regulations will cause the Guyanese dollar to further slide since a great many persons not wanting to give their identifications or addresses, will now change their foreign currency on the streets rather than at the legitimate money changing businesses such as banks and cambios.
Even though yesterday’s incident may not have involved a currency transactions, it does point to the danger that citizens face when undertaking financial transactions. It shows the need for greater privacy and confidentiality in undertaking monetary transactions in Guyana and this is why many persons are going to be extremely apprehensive about reveling their true identities and addresses to money changing institutions.
Another area of concern that many citizens have is whether the taxman will have access to the remittances that they receive and whether he or she will treat this as taxable income. Most of these sums that are received are to help out families that already unable to support themselves.
Other remittances are sent to help out with repairs to the remitters’ buildings or to pay some expense relating to weddings or funerals? There is concern now that with identification now being demanded for these transactions that they will become taxable. This is an area that needs clarification more so because the tax rate is 33 per cent.
This is another reason why persons are going to be circumspect about providing identity. The regulations demanding an address and regulation will therefore force persons to prefer informal transactions such as the money- changers on the streets who do not ask for any identification.
The government must appreciate the value of remittances to the economy and the need for these remittances to continue. What is needed are measures to increase the transfers, not regulations that will force these transactions underground.
If money laundering is a problem in Guyana, the government has to develop plans to deal with this cancer. The fight against money laundering is not going to be won by peering into the transactions of the small man. This is not where the money laundering is taking place.

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A BAD MOVE AT CHRISTMAS TIME

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A BAD MOVE AT CHRISTMAS TIME

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