Strong AML regime will protect Guyana from severity of de-risking practice – Finance Minister

Apr 13, 2017 News

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Guyana would be in a firm position to protect itself from the severity of de-risking practice once it has a strong Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime in place, said Finance Minister,

Winston Jordan.
The economist, addressing the opening ceremony of the final workshop of Guyana’s first National Risk Assessment (NRA) at the Marriott Hotel, yesterday, said that this workshop will enable policymakers to better identify and understand the money laundering and terrorist financing threats that Guyana faces. They will also identify vulnerabilities across all sectors of the economy.
Mr Jordan said that heightened prudential standards have caused international banking institutions to prevent reputational risks and avoid penalties by reducing or severing their relationships with jurisdictions that are perceived to be high risk, due to inadequate AML/CFT regimes.
Jordan said that many developing countries, including those in the Caribbean are adversely affected by this de-risking practice.
He said, “Some of our local financial institutions either have completely lost or have reduced relationships with their correspondent banks. This development creates difficulties, including higher cost for individuals and businesses involved in the trade of goods and services, including remittances.”
With this as his premise, the Finance Minister contended that an efficient AML regime will protect Guyana from the harshness of the de-risking practice and sustain the level of development in the county.
Furthermore, the Finance Minister commented that given Guyana’s geographic location, porous borders, and the cash-based nature of the economy, these factors make it vulnerable to money laundering/ terrorist financing activities.
Jordan said that Guyana’s dependence on international trade in goods, services and financial transactions increases the country exposure to illicit activities.
The Finance Minister said that recent reports emanating from both the United Nations General Assembly and the Financial Action Task Force (FATF) have acknowledged that money laundering is now shifting from financial transactions to more trade- related activities.
“As the Minister of Finance, I am very cognizant of the catastrophic macroeconomic effects that ML/TF can have on our country, if left unnoticed and unattended. I am aware that it can impair the integrity and stability of the domestic financial system, the current and capital accounts of the balance of payments, and reduce legitimate financial inflows entering the country,” Jordan expressed.
He added, “These predicate offences also have the potential to drastically reduce the government’s actual revenue collection. In addition to its impact on corruption and engendering a lack of confidence in the economy, money laundering can also negatively affect investment and, ultimately, distort economic growth.
“And so, it is to safeguard against these eventualities, that the Government of the Guyana has been making stringent efforts to strengthen the country’s AML/CFT regime, through appropriate enactments and amendments to the relevant laws.”
Furthermore, the Finance Minister said that Guyana is committed to maintaining an effective AML/CFT regime that gives priority to effective supervision and enforcement of the laws.
Jordan said that even though Guyana has made significant progress over the last two years in enhancing its AML/CFT regime, and has effectively implemented many global standards, the Government will continue to be vigilant.
The Finance Minister said that the government will move with alacrity to enact the relevant legislation to address new threats and vulnerabilities.
“And so, now that the NRA working group has completed a comprehensive analysis of Guyana’s AML/CFT risks, the National Action Plan that is prepared by the team will not only satisfy FATF’s recommendation 1, which stipulates that countries must identify, assess and understand their ML/TF risks, and apply combating measures using a risk- based approach, but it will also form the basis for the efficient allocation of the country’s scarce financial resources,” the Finance Minister expressed.
Jordan said that Guyana is on a mission to enhance financial inclusion to promote poverty reduction and national development.
The economist also expressed his satisfaction having learned that financial inclusion was aptly addressed during the NRA exercise.
He said that the Government wants to ensure that regulations do not unintentionally exclude businesses and individuals from the formal financial system, but instead, measures can be relaxed when financial products are not considered high risk.

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