Govt. revokes Mohamed’s Cambio licence

Jun 14, 2024 News

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– says move part of safeguarding financial sector following US sanctions

Kaieteur News – In a move to safeguard the country’s financial system, Vice President (VP) Bharrat Jagdeo on Thursday disclosed that the Bank of Guyana (BoG) will be revoking the licence of Confidential Cambio, which is owned by one of Guyana’s wealthiest families, the Mohameds.

On Tuesday, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the imposition of sanctions on Nazar Mohamed, his son, Azruddin Mohamed, and their entities for allege corruption.  A section of the U.S body statement notes, “In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.”

Shortly after the Vice President made the announcement during his press conference at the Office of the President, the Central Bank published a notice informing the public of the revocation of the licence of Confidential Cambio located at Lot 29 Lombard Street Werk-en-Rust, Georgetown. It was stated, “in accordance with the Dealers in Foreign Currency (Licensing) Act 1989. As a consequence, the entity is no longer authorised to conduct the business of buying and selling of foreign currency.”

Jagdeo told reporters that since Tuesday, the Government of Guyana made contact with the Central Bank and the Financial Intelligence Unit (FIU) and request a report on the implications of the sanctions on the country’s financial system. “So they will present a comprehensive report on the implications of the sanctions for our financial systems, we want to safeguard our financial system,” he continued.

The Vice President explained that the exposure of local banks and other agencies with financial bearings to the Mohamed’s could have implications on the local financial system. “We are obligated to do so, under their sanctions which are [to] safeguard the financial sector of Guyana,” he noted. Jagdeo continued, “The Central Bank of Guyana has already notified us that they have notified the Mohamed’s that they will be suspending their cambio licence.”

The Vice President underscored that Central Bank and FIU reports will look at the implications the sanctions will have on the broader financial system. He noted that the government also asked other agencies that have engagements with the Mohameds to review all transactions and also present a report to the government. “We don’t want to expose our country to problems because of these sanctions and non-compliance with these sanctions.  We don’t want to expose government entities to potential sanctions,” the Vice President noted.

Evading gold tax

During his press conference, Jagdeo addressed the allegations raised by the OFAC, that the Mohamed’s allegedly evaded more than US$50 million on taxes on gold imports and exports. He assured that those found guilty of breaking the law will be held accountable.  Jagdeo said, “We indicated to the US government that we will be seeking information to aid local investigation and possibly prosecution or the collection of the evaded taxes.”

Jagdeo underscored the government’s commitment to ensuring that the Mohameds are subject to due process, just like any other citizen. “We intend to fully investigate this matter. We intend to prosecute those who break the law. We will work in full partnership with the US government.”

According to the OFAC, the Mohamed’s allegedly evaded tax on gold exports and defrauded the Guyanese government of tax revenues by under declaring their gold exports to Guyanese authorities. “Between 2019 and 2023, Mohamed’s Enterprise omitted more than 10 thousand kilograms of gold from import and export declarations and avoided paying more than US$50 million in duty taxes to the Government of Guyana,” the US Treasury alleged.

It further alleged that: “Mohamed’s Enterprise has bribed customs officials to falsify import and export documents, as well as to facilitate illicit gold shipments. Mohamed’s Enterprise had paid bribes to Guyanese government officials to ensure the undisrupted flow of inbound and outbound personnel that move currency and other items on behalf of Azruddin and Mohamed’s Enterprise,” OFAC alleged.

Illegal Selling of Gold

Moreover, in response to a growing concern over illegal gold trading, the Guyana Geology and Mines Commission (GGMC) has issued a stern reminder to all stakeholders regarding the lawful sale of gold in the country. Under Sections 6 and 8 of the Guyana Gold Board Act, individuals engaged in gold production, including miners and tributors, are mandated to sell all gold exclusively to the Guyana Gold Board (GGB) or authorized buyers. These authorized buyers consist of six licensed Gold Dealers sanctioned by the GCB, as well as licensed traders authorized by the GGMC. GGMC emphasised that miners, operators, and tributors must comply with these regulations without exception.

GGB operates offices in key locations such as Georgetown, Port Kaituma, Bartica, and conducts mobile transactions in various mining districts to facilitate lawful gold transactions. Law enforcement agencies are actively pursuing stringent measures to ensure compliance with these regulations. Those found in violation of the law face criminal prosecution. Furthermore, miners who are complicit in illegal gold trading risk severe penalties, including the revocation of their mining tenures and exclusion from the mining sector. Miners are urged to abide and operate within the confines of the legal requirements for the sale of gold, and remain vigilant in ensuring that all gold transactions are conducted through official channels. For further guidance or clarification regarding the correct procedures for selling gold, or to report any suspicious gold trading activities, persons are asked to contact the GGMC or the Ministry of Natural Resources.

Favourable treatment/contracts

OFAC also sanctioned Government official, Mae Thomas who is the Permanent Secretary of the Ministry of Labour, who has since been sent on leave pending the investigation. Thomas has been implicated in the Mohamed’s web of corruption. In exchange for cash payments and high-value gifts, it was stated that Thomas misused her position, while as PS for the Ministry of Home Affairs to influence the award of official contract bids and the approval processes for weapons’ permits and passports on behalf of Mohamed’s Enterprise.

While the department only named and sanctioned Thomas, it was stated that other government officials are complicit for accepting bribes and giving the Mohamed’s favourable treatment. “In return, corrupt officials receive cash and gifts for incidents that are overlooked. Additionally, Mohamed’s Enterprise has paid bribes to corrupt Guyanese government officials to facilitate the award of government contracts,” the OFAC alleged.

In his response yesterday, Jagdeo explained, “We also looked at the government contracts because that was another issue…it said that they (the Mohamed’s) were bribing officials to get contracts.”

He noted that according to information from the National Procurement and Tender Administration Board (NPTAB), the Mohamed’s received two government contracts since 2020: one for the Guyana Fire Service Headquarters, and the second for one lot at the Lusignan Prison. “Both of them were public tenders, they were not selective tenders,” Jagdeo noted. Notably, he explained too that while the Mohamed’s was the lowest bidder for three of the lots for the construction of the Lusignan Prison, they were only allocated one lot. That project was for some $370 million.  For the construction of the GFS Headquarters, the Mohamed’s was also the lowest bidder. The contract was awarded to the tune of $614 million.

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• Bharrat Jagdeo, financial system, Mohameds, OFAC, Vice President (VP)

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