Guyana can still pose risk to int’l financial system – FATF

Feb 24, 2016 News

---

By Abena Rockcliffe
While Guyana continues efforts to move from the clutches of the Anti-Money Laundering/Countering

the Financing of Terrorism (AML/CFT) censoring regime, the Financial Action Task Force (FATF) still thinks that the country can pose a risk to the international financial system.
Guyana finds itself in the company of countries such as Afghanistan, Bosnia and Herzegovina, Iraq, Lao PDR, Myanmar, Papua New Guinea, Syria, Uganda, Vanuatu and Yemen.
There are only two countries in the world that are deemed to be worse off than Guyana in this regard – Iran and the Democratic People’s Republic of Korea
The FATF identifies itself as the global standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from money laundering and financing of terrorism (ML/FT) risks and to encourage greater compliance with the AML/CFT standards, the FATF identifies jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.
On February 19, FATF concluded its most recent plenary meeting in Paris, France.
A document titled, “Outcomes of the plenary meeting of the FATF, Paris, 17-19 February 2016” indicates that the body still views Guyana as a work in progress.  That document contains two sections that identify jurisdictions that may pose a risk to the international financial system.
In those two sections, FATF pointed out jurisdictions with strategic AML/CFT deficiencies that have developed action plans with the task force, as well as jurisdictions with strategic AML/CFT deficiencies for which a call for action applies.
Guyana has been identified as one of the jurisdictions with strategic AML/CFT deficiencies that have developed an action plan.
FATF noted, “In October 2014, Guyana made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. Since October 2015, Guyana has taken steps towards improving its AML/CFT regime, including by enacting further amendments to the AML/CFT Act and AML/CFT Regulations, and issuing FIU guidelines on targeted financial sanctions. However, the FATF has determined that certain strategic deficiencies remain. Guyana should continue to implement its action plan, including by ensuring and implementing an adequate legal framework for identifying, tracing and freezing terrorist assets. The FATF encourages Guyana to address its remaining deficiencies and continue the process of implementing its action plan.”
While there were a few variances, Afghanistan, Bosnia and Herzegovina, Iraq, Lao PDR, Myanmar, Papua New Guinea, Syria, Uganda, Vanuatu and Yemen have been given similar advice.
Only two countries have been called upon to develop an action plan.
FATF said it remains particularly and exceptionally concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.
The task force urged Iran to “immediately and meaningfully address its AML/CFT deficiencies, in particular by criminalizing terrorist financing and effectively implementing suspicious transaction reporting requirements. If Iran fails to take concrete steps to continue to improve its CFT regime, the FATF will consider calling on its members and urging all jurisdictions to strengthen counter-measures in June 2016.”
However, with regards to the Democratic People’s Republic of Korea, the task force reaffirmed its 25 February 2011 call on all its members and urged all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with that jurisdiction, including Korean companies and financial institutions.
“In addition to enhanced scrutiny, the FATF further calls on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.”
When he addressed the National Assembly to deliver his contribution to Budget debates, Attorney General and Minister of Legal Affairs said that his government is making concerted efforts to remove Guyana from FATF’s watch list.
He had said that tremendous progress was made since the new government assumed office.
Williams pointed out that the Americas Regional Review Group (AARG), in its latest report that was to be presented at FATF’s plenary meeting, highlighted the progress that Guyana made.
The Minister has quoted a section of the report which stated, “The main development in Guyana is the enactment of the AML/CFT Amendment Act 2015 which became enforceable on 10 July 2015.  The FIU has also issued guidance on targeted financial sanctions and a money laundering typology report on the gold jewellery trade in August 2015…Guyana has continued to demonstrate its commitment to comply with the action plan and is to be commended for having met most of the deadlines.”

---

---