The sanctions relate to assets held in the US and to transactions within or by US citizens or companies

Jun 24, 2024 Features / Columnists, Peeping Tom

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Peeping tom…

Kaieteur News – The United States Department of Treasury recently imposed sanctions on Nazar Mohammed and his son. Those sanctions are extra-territorial in reach in that they target persons outside of the United States. They also target the assets, of the targeted persons, that are within the United States.

What the sanctions means is that any assets or interests of the Mohammeds and their companies held in the United States are blocked. The Mohammeds or anyone else cannot have access to those assets.

The sanctions also mean that U.S. citizens and businesses cannot engage in transactions with the Mohammeds, their companies nor their assets. This includes providing or receiving any funds, goods, or services from or on behalf of them. United States financial institutions, including banks, cannot provide services to the Mohammeds. In effect, the Mohammed’s assets are blocked in the US, they cannot do business with US firms and they cannot utilize the US financial system.

However, these sanctions do not force other countries to take action against sanctioned individuals. The sanctions imposed under U.S. laws, such as the Magnitsky Act, only apply to U.S. persons and entities, and to activities within or transiting through the United States.

The Government of Guyana, however, obviously facing embarrassment, by the actions of the US Department of Treasury, took extreme action. It immediately revoked the cambio licence of the Mohammeds. While it is clear that local banks cannot transact any financial transaction with the sanctioned individuals once those transactions have to utilize the US financial system, there is nothing in the announcement by the Department of the Treasury that indicates that any local bank or person who does business with the Mohammeds will be liable to sanctions.

The Guyana government is obviously concerned about the implications of the sanctions on the country’s financial system but, so far, this only relates to the use of US intermediary banks. It can hardly mean that the sanctioned individuals cannot walk into a local bank and open up a savings of chequing account or have access to any assets they can have within the local banking system.

There is no treaty enacted into our local laws that would allow the Bank of Guyana, as the regulator of the country’s financial system to instruct or advise local financial banks not to do business with the Mohammeds based on some edict of the United States. The United States has no power to block assets held in Guyana.

The Bank of Guyana must therefore explain the basis on which it opted to revoke the cambio licence of the Mohammed. It must also indicate whether in revoking the licence it provided the Mohammeds with the right to a hearing as provided for in the law.

As far as I understand it, we do not have laws in Guyana which allow the government to arbitrarily freeze the local assets of anyone. As far as I believe, this can to be an issue for which the Courts have to so direct.

The Mohammeds used to operate a cambio. Why should they have been prevented from buying and selling foreign currency in accordance with the licence granted to them? How does this place the local financial sector at risk when the sanctions relate to foreign-held assets and dealings by US citizens and companies with the sanctioned persons?

This issue has arisen because there is talk around the town that no local person or company can do any business at all with the Mohammeds. So does this mean that the supermarkets cannot sell any food to the family? Or that the more than 200 workers which the Mohammeds employ cannot be paid through the banking system?

Does this mean that the schools which the children and grandchildren of the family attend can no longer teach them? Does this mean that the fruit vendor that sells on the pavement outside the mosque cannot sell the sanctioned persons a slice of watermelon?

These are issues which the President should have addressed during his weekly press conference. There is no need to write the US Department of Treasury to ascertain the scope and reach of the sanctions. The US embassy could have advised on this or the Guyana Embassy in Washington could have interfaced with the US Department of Treasury.

Vice President Jagdeo has indicated that the government has sought an opinion on the implications of the sanctions imposed on the Mohammeds. At the least one would have expected that the government would have awaited the report before taking any precipitate action.

It should be noted also that the sanctioned individuals have a right to contest the designation by the Department of Treasury so as to have their names removed. The very law under which the sanctions were made allows for this to be done.

But the Guyana government is jumpy. It is not waiting on the outcome of due process. As a result, it may be overreaching in its reaction. (The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

 

 

 

 

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• cambio licence, department, licence, Magnitsky, Mohammeds, Vice President Jagdeo

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