Guyana faces blacklist if Vice News corruption claims not addressed –economist

Jul 15, 2022 News

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Kaieteur News – The international community takes matters of money laundering very seriously and Guyana would know this very well since the country was blacklisted by the Caribbean arm of the international Financial Action Task Force, CFATF, for being a high-risk jurisdiction for money laundering just a few years ago. Considering that drug and human trafficking and corruption among other crimes generate large sums of illegal cash, it is understandable why there is a global stance against the financial scourge.

Guyana was under immense pressure by CFATF since 2011 to address deficiencies in its anti money laundering (AML) legislation and was offered a legislative programme to implement in an effort to rescue its reputation and remain an able to conduct business globally. Appropriate measures were required to ensure the full criminalization of money laundering and financing of terrorism offences; addressing among other things, suspicious transactions and the freezing and confiscation of terrorist assets.

The country had failed to get its business done within relevant timeframes and saw more warnings coming from the CFATF to make the necessary changes in 2013. By 2018 FTAF was congratulating Guyana for the significant progress it made in addressing its AML/CFT deficiencies and was no longer a subject to the FATF’s monitoring under its global AML/CFT compliance process. However, recent damning allegations against the government, in particular, Vice President Bharrat Jagdeo by Chinese businessmen here claiming rampant corruption in the country’s business environment could land Guyana right back into the AML/CFT dog house, Economist Elson Lowe has opined.

He told the Kaieteur News that should the Vice News corruption report remain unchecked and uninvestigated, Guyana could see itself being blacklisted again given the startling detailed revelations on how illegal money is systematically moving in and out of the country. A part two of the Vice News “Guyana for sale” documentary, aired just days ago, featured apparent Chinese money launders, claiming to have the capacity to transfer money. They told the undercover Vice News reporter that they have a team in China and that they would transfer cash for both private and Chinese state-owned companies. To launder the cash, it was explained that a “flying money” system is used where cash is placed in a bank account in China and the equivalent amount, minus a hefty fee is taken out of Guyana for getting around taxes and border restrictions. If the transfer involves drug money or dirty money for corrupt Chinese officials, the launder whose face was shown on the video, said that there are ways of handling those also.

Lowe, who held the post of Anti-corruption policy analyst at the now defunct State Asset Recovery Agency (SARA) has stated however, that the fact that there has been an allegation about a widespread money laundering ring, involving drug money and money from corrupt Chinese officials, is extremely disturbing. He said, “this is because it means that if true, there is an underground economy that has a huge influence on government decisions and even from a Chinese government perspective they would want an investigation because allegations were made that China’s laws and taxes were being evaded, even where corrupt Chinese officials are involved.” He said that if this is happening in Guyana it is likely happening in other countries, “so an investigation might allow the Chinese to bring down an international money laundering ring.”

Where Guyana is concerned, Lowe said if the country does not launch investigations into these allegations of corruption and money laundering, “we may find ourselves at risk of being blacklisted once again because it will raise the concern that the banking system, which has controls to prevent money laundering and the financing of terrorism is being circumvented, rendering many of Guyana’s anti-money laundering laws ineffective.” “Obviously if we’re blacklisted that will discourage investment by foreign investors who will find it difficult to bring money into the country and take it out.”

One of the things most disturbing about the Vice news story, Lowe continued is that one of the Chinese businessmen, who claimed to have paid a bride to do business here, said that nothing gets done without bribes. “This is very different than saying that bribes help you get contracts because the impression it gives international investors is that you cannot invest unless you’re willing to bribe.” Lowe said many companies and investors will be unwilling to bribe, but more than that may face legal action in their home countries if they engage in bribery. He said in the United States such a response is demonstrated in that country’s Foreign Corrupt Practices Act which prohibits bribery abroad. “As a result, many large international investors that are unwilling to face these types of risks, will likely avoid Guyana altogether unless investigations demonstrate that the government is serious about addressing corruption.” Apart from falling back on the FATF and CFATF radar, Lowe is worried about what the VICE report could do to investor confidence in the country.

Both President Irfaan Ali and Vice President Bharrat Jagdeo have made public statements that the VICE News allegations should be investigated. Opposition Leader Aubrey Norton and other stakeholders have repeatedly called on Jagdeo to step down as VP to make way for an independent investigation into the matter. This they said will help to secure local and international confidence in Guyana’s ability to conduct clean business.

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