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Anti-money laundering fight…Central Bank not privy to ‘suspicious’ transactions at commercial banks
Amidst debate over Guyana’s capacity to deal with money laundering, Central Bank has made it clear that commercial banks are not mandated by law to provide information on suspicious accounts.
Bank of Guyana Governor, Lawrence Williams
The assertion was made earlier this week by Governor of Bank of Guyana, Lawrence Williams, in a statement on the role of that financial institution.
Williams was responding to an editorial in Kaieteur News on May 30 on the role of the Central Bank to ensure that dirty money is not wiped in the local banks.
The issue is a burning one now with new legislations being studied by Parliamentarians. Guyana, as part of an international agreement to ensure its local systems are protected against illegal proceeds being deposited in the local banks, was supposed to have met a May deadline to ensure critical changes in the laws. These include strengthening of penalties, reporting mechanisms and even the closing of loopholes that will allow for the seizure of properties believed to be acquired by illegal means.
According to the banker, the Anti- Money Laundering and Countering the Financing of Terrorism Act No. 13 of 2009 (The Act), provides that reports of suspected money laundering and terrorist financing should be made to the Financial Intelligence Unit(FIU), a body established under the same Act.
Under the Act, reporting entities, including banks and other financial institutions, are the ones obligated to report all suspicious transactions to the FIU.
The FIU, upon receipt of such reports, has the responsibility of analyzing and forwarding these reports to the competent authority, including the Director of Public Prosecutions, if there are reasonable grounds to suspect that a transaction involves money laundering or terrorist financing. The role of the Central Bank is quite different, Williams said.
The Act appointed the Central Bank as a supervisory authority with the mandate of compliance oversight over some of the reporting entities, including commercial banks. The bank, as supervisor, must ensure the financial entities are conducting their businesses in compliance with the provisions of The Act and that they have implemented adequate controls aimed at preventing criminals from using the financial system to launder funds and facilitate terrorist financing.
“Further, commercial banks are not required by the Act or by any other piece of legislation to provide, to the Central Bank, information on its transactions and as such the Central Bank is not privy to “all transactions that occur in the commercial banking system…”
The statement would take even more significance in light of the growing criticisms that Government has failed to tackle money laundering in a significant way.
There has been no major prosecution or seizures of assets.
Government has blamed this on the absence of legislations. However, the Opposition has accused Government of foot-dragging on the issue, despite knowing that a deadline was approaching to have the legislations amended to meet international requirements.
Guyana was forced to ask the regional oversight body for an extension of time recently. Guyana now has until November to get its house in order. Failure to put adequate systems in place could see Guyana facing financial sanctions, with the regional body already issuing warnings to government.
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