Going after the financial stream is the least effective counter narcotics strategy

Nov 03, 2013 Features / Columnists, Peeping Tom

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Foreign governments are imposing a wide range of regulations and laws on countries like Guyana because they feel that these measures are necessary to protect the rich countries’ national security interests. These laws are not about Guyana’s interest; they are about the interest of the Americans.
Most of these laws and regulations will never see the light of day. It is therefore a waste of time for any serious deliberation to be taking place about strengthening our money laundering laws outside of what is required to comply with our international obligations, because these laws and regulations are intended solely to protect the interests of the United States of America, the largest narco-economy in the world.
It is to the United States that most of the illegal narcotics end up. It is therefore that country which generates the greatest proceeds from the sale of narcotics and thus it is from that country that more money is laundered than anywhere else in the world.
But for all the money laundering laws and regulations in that country, countering money laundering in the United States has been a dismal failure. Of all the measures that have been put in place to counter the illegal trade in narcotics, the least effective and the greatest failure has been those related to money laundering. Given the billions that are laundered each year in the United States of America, only a pittance relative to the total proceeds laundered is ever recovered through anti-money laundering investigations and prosecutions.
The United States has had far greater success in nabbing small drug pushers than they have had with money launderers. In fact, right under their noses, over eight hundred million dollars were laundered by a major US bank. This bank was this year fined in excess of 1.9 billion dollars for slack oversight that allowed the funds to pass through the US financial system.
This fine is a slap on the wrist. It sends the wrong message. None of the bankers were charged and jailed. Neither was their assets seized. But catch a drug pusher and Uncle Sam goes after that person with a vengeance, locking them away in jail for years and then going after their financial assets.
By the time Uncle Sam is finished going after his assets, the drug pusher is left with only his shorts. Uncle Sam seizes everything from that small drug pusher. But when it comes to the bankers whose negligence allows hundreds of millions to pass through the system, all they receive is a fine.
And if the drug pusher is an immigrant, he is deported after serving his sentence. Despite all of these measures against traders in illegal narcotics, counter money laundering operations have been a terrible failure not just in the United States but elsewhere also.
The US has had greater success in countering the drug trade through direct drug interdictions, renditions of suspects, and by supporting initiatives like Operation Kingfish which nab major drug lords. This policy of going after the drug lords and then to rendition them to the United States has proven multiple times more successful that going after their financial assets.
Much of the anti-money laundering laws and structures that the US has set up within its jurisdiction will remain underutilized, because by now the US knows that going after the financial stream in order to get at drug traders is the least effective counter narcotics strategy.
That is something that our local legislators need to understand. They are making too much of a fuss about the adequacy of the draft legislation that the government wants to enjoy passage through the National Assembly. Much of these laws will never be utilized. There is a unit set up in Guyana to monitor suspicious financial transactions and to take action within the ambit of the laws that are in place. That Unit will remain a white elephant because countering money laundering is a most expensive proposition with limited success.
If we want to stop drug money from infecting our economy, we have to go after the drug lords by catching them and jailing them. Or we have to support Uncle Sam to nab them in the United States or in third countries. Going after their financial assets will not be highly successful.
This is why there can be no justification for the opposition not passing the laws against money laundering that the government wants passed. The opposition need not worry about whether the laws are adequate. The best of laws will end up not being used.
The main priority at this stage should be compliance with the country’s international obligations to the Caribbean Financial Action Task Force, so as to avoid sanctions that can affect local businesses and thus hurt the economy of Guyana.
You can bet that if sanctions take effect, it is not the drug dealers that will feel the pain. It will be the small man who depends on the US$200 that is sent each month for him from relatives overseas.

 

 

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