POWERS TO STOP AND SEARCH CAN COMPROMISE MONEY LAUNDERING INVESTIGATIONS

Mar 04, 2014 Features / Columnists, Peeping Tom

---

If there is a law under the existing anti-money laundering legislation that presently grants powers to the police to search and detain anyone having in excess of two million Guyana dollars, why then make a proposal for these powers to be included in amendments? Why amend that which already exists?
The powers in the present law do not, however, grant powers to customs and police to search and detain anyone on suspicion of having illicit funds. If this is the understanding of the opposition parties, it is a misunderstanding.
Under the present laws, the authorities only have the power to search if they believe that someone has committed the offence of not declaring currency being brought into or exported out of the country in excess of the equivalent of ten thousand US dollars. These are powers to deal with a crime of not declaring currency at ports of entry and exit.
It is not unlawful to carry currency in and out of the country.  It is only unlawful for it not to be declared when it is above a certain sum. The powers exercised by law enforcement officers can only be exercised if they suspect that someone is carrying currency in excess of the equivalent of ten thousand US dollars, for which that person has not subscribed to a declaration in the appropriate form.
If someone is carrying fifty thousand US dollars out of Guyana, they do not have to explain to the officers where they got it from and how they got it. They only are required to declare it. Failure to declare it is an offence, and it is upon suspicion that this offence is being committed that someone can be detained and searched to see whether they are exporting currency in the sum of or in excess of that which is required to be declared to the authorities.
The reason for declaration is to allow for financial trace. This is the basis upon which money laundering investigations are launched. The authorities are interested in establishing a pattern regarding the movement of finances in and out of the country.
Money laundering begins with this movement, either in or out of the country, of currency. And by making declarations, the authorities can establish financial traces on suspicions transactions.
It would be an anomaly to have a situation whereby you can walk through our airports with twenty thousand US dollars, providing you sign a declaration that you are doing so, but when you walk down the streets of the city with half of this sum, you are liable to be searched and the currency detained.
You are not required at the airports to state where you got the funds. You only have to declare it. But if you walk down the road, with the same sum and you are stopped by the police, you have to give them a satisfactory explanation before you get back your money. This is what the opposition amendment to the anti-money laundering laws will create. The opposition clearly does not understand the implications of the amendment they are proposing.
Money can also be laundered within an economy. This is why the law as presently drafted allows for the financial institutions to require persons dealing with sums in excess of two million dollars to indicate the source of the funds. If the banks have reasons to believe that the course of any financial transaction is questionable, they are obligated to report this as a suspicious transaction to the financial investigative unit dealing with money laundering offences.
Imagine, therefore, someone does a transaction with the bank, declaring the source of funds. The bank does not deem the transaction suspicions because they can see clearly that the funds are legitimate. But no sooner does the individual step outside of the bank, they are stopped and searched by the police, their currency declared and they are required to do what they have already done in the bank.
Money laundering cases are not built over time. They can take an inordinately long time. Timing of charges is important. The US does not move on someone until they have assembled strong enough evidence to secure a successful conviction. The case takes time, and in most cases the person being investigated does not have a clue that their transactions are being scrutinized.
In this context, imagine a different scenario from the one given above. Imagine a situation whereby someone walks into a bank and conducts a transaction in excess of two million dollars. This time, though, the bank has suspicions about the legality of the course of funds. As such the bank prepares its report for sending off to the financial investigative unit.
The unit, which deals with money laundering offences, receives the report and begins to red flag a number of similar transactions. It begins to monitor closely the source of the funds by this individual. It is building a case slowing but surely. It is putting the pieces together unknown to the person being investigated. It is able to do this because it is receiving, confidentially, the reports of suspicious transactions from the banks.
The least thing it wants is for the individual being investigated to know that he is under financial surveillance. If this happens, the whole investigation can be compromised, since the individual will take steps to cover his tracks.
However, while this case is being built, the police prematurely and without coordination with the financial investigative unit, stops and searches the individual and demands to know from where he got the money he has in his possession. The individual will then realize that the authorities are onto him. He will take action to cover his tracks and this can compromise the ongoing investigation by the anti-money laundering unit. He may even disappear.
The point is that too many cooks can spoil the broth. Money laundering investigations can be frustrated and compromised if too many agencies are undertaking investigations or exercising powers relating to money laundering.
Charges have been filed against someone for money laundering in Guyana. The basis of these charges had nothing to do with funds found in the physical possession of the person charged. Rather it related to that person’s account being allegedly used to launder funds for others.
To grant powers to the police and the customs to stop, search and detain currency will not only lead to abuse, it will also be counterproductive to effective money laundering investigations.

---

---