International Narcotics Control Strategy Report finds…Limited effectiveness of SOCU, FIU, Police affect AML efforts

May 25, 2017 News

---

—Lack of cooperation by business community an inhibiting factor

By: Kiana Wilburg
A recent report by the United States Department of State has noted that the effectiveness of the core agencies involved in the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in Guyana is limited.

The International Narcotics Control Strategy Report Volume II noted that the major agencies involved in the anti-drug and anti-money laundering effort include the Office of the Attorney General, the Finance Intelligence Unit (FIU), Ministry of Finance, Bank of Guyana, Guyana Police Force, Guyana Revenue Authority (GRA), the Customs Anti-Narcotics Unit, and the Special Organized Crimes Unit (SOCU).
Although the AML legislation gives the FIU authority to investigate alleged money laundering, the report noted that the FIU does not have the capacity to conduct such investigations. It also noted that SOCU investigates those cases referred to it by the FIU.
The documented said, “The effectiveness of these agencies at investigating money laundering is limited, as they lack adequate human resources, training to ensure successful prosecutions, and a strong interagency network. Additionally, lack of cooperation by the business community also hinders Guyana’s AML (anti-money laundering) efforts.”
Furthermore, the report said that despite its limited staffing capacity, in February, SOCU seized roughly US$80,000 and arrested two persons suspected of money laundering.
This was the first seizure under Guyana’s updated AML legislation.
The US Department said that Guyana should raise awareness and understanding of AML laws and pursue the implementation of procedures. It said that this can be done through training and the publication of guidelines within the judicial system and in agencies with the authority to investigate financial crimes.
The report said that wire transfers, and customer due diligence regulations should be strengthened and additional resources extended to the FIU and SOCU.
Furthermore, it was Attorney General and Minister of Legal Affairs, Basil Williams, who recently articulated that an effective AML/CFT framework will demand convictions. This is an area in which Guyana has been lacking and Williams is determined to change this state of affairs.
He made this, among other remarks at the auspicious National Risk Assessment (NRA) workshop which was held at the Marriott Hotel some weeks ago.
At the workshop which is expected to conclude today, Williams said that the NRA is a good starting point in the journey towards an efficient and effective AML/CFT regime.
“The National Risk Assessment therefore serves as a yardstick from which to measure Guyana’s progress as well as the weaknesses in our regime; and being equipped with this knowledge, we will be able to know where we have to go if we are to reach our desired goal,” expressed the Minister.
Williams also stated that by completing a NRA, it places Guyana in the company of countries like the USA, UK and Canada who have all found the NRA process to be an effective tool in addressing the defects in their AML/CFT regime.
The Attorney General noted that this process is pivotal to the further development of Guyana’s regime as it puts the nation in a better position to successfully improve on its existing framework.
Through the NRA, Williams stated that the authorities of the day will be able to prioritize and focus on the most crucial areas and strategically allocate resources to strengthen these areas.
He noted that the NRA supports the policy making process by enabling the Government and other relevant bodies to address the loopholes in the regime and to plug those holes.
Furthermore, the Minister said that the fight against money laundering and terrorist financing is an undertaking that requires the coordinated and dedicated efforts of all stakeholders including policy makers, law enforcement, private sector and financial institutions.
He said that Guyana already has laws to detect and prevent money laundering and terrorist financing. While the relevant laws are important, the Minister of Legal Affairs said that it is equally important that stakeholders understand the money laundering and terrorist financing threats, risks and vulnerabilities that the nation faces.
Williams asserted that identifying, assessing and understanding the risks of money laundering will undoubtedly put Guyana in a better position to mitigate those threats and vulnerabilities by implementing the necessary measures.
The Attorney General said that this is an essential part of the development and implementation of any country’s AML/CFT regime. Without going through this process, Williams remarked that Guyana would be operating in a vacuum which is counterproductive.
EFFECTIVENESS
The Attorney General commented that the recent amendments to the AML/CFT Act, which addressed deficiencies in the law, saw Guyana being rated compliant with the Financial Action Task Force (FATF)’s Action Plan.
Williams said that Guyana has exited the FATF monitoring and the Caribbean Financial Action Task Force (CFATF)’s third round of Mutual Evaluations.
Furthermore, Williams said that this significant progress has been recognized by the US Department of Treasury and more recently, the International Monetary Fund (IMF) which has commended Guyana’s efforts.
The AG said that the IMF, while recognizing Guyana’s progress also said that the country “should continue to strengthen its Anti-Money Laundering and Combating the Financing of Terrorism Framework in line with international standards”
Williams said that he shared the sentiments of the IMF especially since the fourth round of Mutual Evaluations by the CFATF in 2022 will test the effectiveness of Guyana’s AML/ CFT regime.
The Minister of Legal Affairs said that using a data driven process to examine and reform every aspect of Guyana’s AML/CFT framework is most critical to ensuring Guyana’s effectiveness.
“Already, we have shown that we have the necessary legislative and supervisor framework in pace. However, effectiveness requires much more. According to FATF, a country’s efforts to develop sound laws and regulations and implementing and enforcing them should focus on one goal, that is the high level objective of an effective AML/CFT framework,” commented Williams.
He continued, “The High Level objective says that ‘Financial systems and the broader economy are protected from the threats of money laundering and the financing of terrorism and proliferation, thereby strengthening financial sector integrity and contributing to safety and security.”
The Minister of Legal Affairs added, “To achieve this high level objective, the FATF has identified 11 key goals that an effective AML/ CFT framework should achieve.”
Williams said that these key goals or “immediate outcomes” are what the FATF will assess Guyana’s efforts against; ultimately determining whether the nation’s AML/CFT regime is effective.
The 11 key goals include; having financial intelligence and other relevant information being appropriately used by competent authorities for money laundering and terrorist financing investigations; confiscation of proceeds and instruments of crimes; and for supervisors to appropriately supervise, monitor and regulate financial institutions and Designated Non-Financial Businesses and Professions (DNFBP) for compliance with AML/CFT requirements commensurate with their risks.

---

---