Possibility of de-risking worries Govt. - AG

Possibility of de-risking worries Govt. – AG

May 25, 2016 News

Attorney General and Minister of Legal Affairs, Basil Williams says that the government is quite worried about the possibility that Guyana may suffer as a result of de-risking.

Attorney General and Minister of Legal Affairs, Basil Williams

De-risking refers to financial institutions exiting relationships with and closing the accounts of clients considered “high risk.”
There is an observed trend toward de-risking of money service with businesses, foreign embassies, nonprofit organizations, and correspondent banks, which has resulted in account closures in the United States, United Kingdom, and Australia.
Low profit, reputational concerns, and rising Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) scrutiny contribute to de-risking, which can further isolate communities from the global financial system and undermine AML/CFT objectives.
Guyana is still on the watch list of the Financial Action Task Force (FATF)—the international body that monitors countries with weak legislation and systems in place to guard against money laundering and the financing of terrorism. Guyana is yet to satisfy all of the recommendations made by FATF. However, under the new government, significant strides have been made.
At a recent press conference, Attorney General Williams said that Guyana has one outstanding recommendation and does not currently stand the risk of being blacklisted.
However, he noted, “This question of de-risking is so serious. It is so serious that they are proposing to hold a conference on de-risking in July”.
Williams said that the conference is proposed to be held in Miami and will be for the entire hemisphere.
The Attorney General said that he is trying his “best” to ensure that Guyana is guarded against de-risking.
“I am trying my best to ensure that we (Guyana) are not at risk of de-risking, it is a bothersome issue, because certain countries in the Region have lost corresponding banking. The former Prime Minister of Barbados wrote an article warning of de-risking and noting what a terrible thing that can be,” said Williams.
He added that the government has been engaging numerous banks, including the World Bank, on measures that can be put in place to completely avoid de-risking. The Minister said that a team from the World Bank recently came to Guyana and the issue was extensively discussed.
The Attorney General said that he is looking to assess the risks that Guyana may have in the system and implement measures to effectively address those.