APNU does not get it!

Mar 06, 2014 Features / Columnists, Freddie Kissoon

A Partnership for National Unity (APNU) does not get it. And probably never will.
There are serious reservations over the proposal by APNU to empower the police and custom officers to search, seize and detain sums found on an individual in excess of two million dollars. APNU has tried to address some of the concerns over this proposal by raising the limit to ten million dollars.
In effect, they have made redundant their own new proposal, because as much as you may find someone moving a few million dollars at any one time, no one is likely to be seen moving around ten million dollars in cash. APNU’s newest amendment will therefore never be enforced, because it caters for an outlier situation.
But APNU misses the real point, and probably will always miss it. It is not the threshold that is important. The issue is the criminalizing of the possession of currency, be it two million dollars or ten million dollars. The issue is about any law determining how much money you should walk around with.
There are businessmen in this country who travel overseas with monetary instruments such as cheques and money orders to the tune of hundreds of millions of dollars. Under the Anti-Money Laundering and the Countering the Financing of Terrorism Act, in force at present, currency is not just restricted to cash, but includes monetary instruments such as those used in commercial transactions. Under our laws and under the laws of foreign countries, they are merely required to declare these instruments to the customs officials. It is not an offence to have the money, and it cannot be seized just because there may be suspicion about its source.
But even with the revised limit by APNU, persons travelling through our airports with money orders from their banks may have those orders seized by the police or customs, even if it is declared.
The police and customs can contend that they suspect that the instruments are backed by illicit funds. They therefore claim a ground to seize and detain the currency, even though it may be in the form of a monetary instrument. The businessman, not wanting to go through the hassles involved with proving otherwise, may be tempted to pass a bribe, and another wave of dispossession of the business class similar to what took place in the days of foreign exchange restrictions and contraband will be relived.
The intent of the Anti-Money Laundering Laws is not to criminalize currency above a certain sum. It is to guard against the laundering of funds, particularly through financial transactions. This is why under the existing laws there are numerous obligations of banks with respect to financial transactions.
You are not going to beat money laundering by having powers to search, seize and detain cash. How can money be laundered in cash? By definition, money laundering refers to attempts to cleanse dirty money. This is not done by having cash. It is done through the importation of goods, paid for with illicit funds. When these goods are sold, the proceeds are the means of cleaning the dirty money.
Illicit funds can also be used to build massive structures and to finance businesses. The illicit monies are usually disguised through intermingling with legitimate funds.
Illicit funds can be used to buy up land, large tracts of land. This is how money is laundered. The launderers do not have to be persons moving around with the currency in cash or cheque.
Monies are laundered in a variety of other ways, most of which at some stage involve financial transactions. This is why the strategy in dealing with money laundering is not to go after cash, but to engage in a process of monitoring financial transactions to determine whether these are legitimate or whether they are tainted, and to trace these transactions right back to the illicit proceeds.
APNU’s latest proposal is not going to help to interdict any money launderer. It will only lead to harassment of citizens by the police. This is because that proposal is based on a less than thorough understanding of the purpose of anti-money laundering legislation and the ways and means through which the bulk of funds are laundered in an economy.
If by now APNU does not get it, it never will! The greatest disappointment, however, is that the Alliance For Change seems to have fallen for APNU’s proposal, hook, line and sinker.