Money laundering risks… Collaboration between agencies needed to prevent chances for abuse –Goolsarran

Apr 07, 2017 News

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Chartered Accountant, Anand Goolsarran, is of the firm impression that there is a need for greater collaboration among various agencies to ensure that car dealerships and real estate businesses are given the protection they need

against customers with ill-gotten cash.
Goolsarran said that car dealers who effect sale of luxury vehicles should be made to inform both the Financial Intelligence Unit (FIU) and the Guyana Revenue Authority (GRA), though the latter would have some information at the time of registration of the vehicles.
The former Auditor General said that GRA also needs to cross-check with the taxpayer’s file to ascertain whether his/her income supports that kind of purchase. When there is a mismatch, Goolsarran said that arbitrary assessments should be raised and the FIU informed.
The Chartered Accountant also stated that the same should apply to real estate businesses. In this regard, Goolsarran articulated that the Deeds Registry should also provide the FIU and the GRA with information when there are changes in transports and certificates of title.
“Again, GRA needs to cross-check with the related taxpayer’s file to verify source of income for the purchase of property. Where such verification reveals unexplained sources of income, arbitrary assessments should be raised and the FIU informed.”
Furthermore, local authorities are of the opinion that the car dealership industry and real estate businesses do not have enough mechanisms in place to limit the chances of being used by purchasers whose sole intention is to launder their ill-gotten cash.
Given these concerns, officials at the Bank of Guyana have told Kaieteur News that this state of affairs needs to be changed. The officials noted that there is currently no individual supervisory body in place to govern the operations of the two areas of business. They opine that lack of supervision leaves both as “easy prey” to money laundering risks. They explained, too, that these two areas are in fact subject to the Anti-Money Laundering and Countering the Financing of Terrorism Act.
The officials were careful to note that they have no intention to discredit those persons in the auto sale business or the real estate sector in a “willy-nilly” fashion.
“However, it is a requirement by law that all loopholes for money laundering be closed, and that is essentially what we understand is being done. It is true that they are without a supervisory body. If you see, for example, the casinos, they have a supervisory body in the form of the Gaming Authority.
But indeed there needs to be enough checks and balances in the real estate area and in the car dealership area, so that businesses can be able to protect themselves from those who have a different agenda,” one senior Bank of Guyana official explained.
He added, “This is something that is also being looked at internationally, so it is not unique to see Guyana looking to remove every opportunity for abuse.”
The officials reminded that the International Monetary Fund (IMF), was recently in Guyana to assess the economic health of the nation and in doing so, it examined the strengths and weaknesses of the financial sector. A number of observations were made in relation to the financial sector, including the fact that Guyana still has more work to do with regard to strengthening its anti-money laundering measures.
According to the IMF, Guyana has commendably exited the Financial Action Task Force monitoring and concluded a National Risk Assessment. However, “It should continue to strengthen its Anti-Money Laundering and Combating the Financing of Terrorism framework in line with international standards.”
The body also zeroed in on the need for “stronger supervisory and regulatory regimes”, in line with the World Bank’s Financial Sector Assessment Program (FSAP).
Another body which has zeroed in on the need for greater scrutiny of car dealerships and real estate businesses was Transparency International. The global watchdog recently completed a report “Tainted Treasures: Money laundering risks in luxury markets”, which highlights concerns that luxury good sellers are doing little to check if their customers are using corrupt money to fund their high-end purchases.
Transparency International is calling for Governments in high-risk countries to introduce specific laws to mandate due diligence for high-risk luxury goods sales and establish a designated authority to enforce them.
“For the corrupt, the luxury sector is more than just a money laundering vehicle. The behaviour of kleptocrats who amass millions of dollars in properties, sports cars and art, in a short period of time, shows that the desire to own luxury can in fact be one of the drivers of corrupt behaviour.
“The luxury sector has a responsibility to prevent public funds, which could have gone to schools and hospitals, from being splurged on their products even if it means fewer sales,” said Transparency International Chair José Ugaz.

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