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Govt. to overhaul financial laws in light of U.S. sanctions
President Irfaan Ali
Kaieteur News – Guyana’s financial laws are to be amended in light of recent sanctions imposed on three Guyanese – two businessmen and a government official- who were allegedly involved in tax evasion and corruption, President Irfaan Ali said last week.
The Head of state said that following the sanctions imposed on Guyanese billionaire Nazar Mohamed, his son Azruddin Mohamed, and government official Mae Thomas amendments to the Financial Institutions Act will be forthcoming.
He highlighted the importance of aligning the law with international standards, stating, “Soon you will see we will be bringing to Parliament a Bill to amend the Financial Institutions Act to ensure further compliance with international banking standards, the basal core principles on banking supervision.”
The amendments aim to modernize Guyana’s banking sector by adopting the latest legal frameworks, rules, regulations, and principles.
“These amendments will allow us to the top tier, beyond any other jurisdiction in this Region in relation to the banking sector,” President Ali added.
A notable change includes allowing foreign financial institutions to establish representative offices in Guyana with prior approval from the central bank. President Ali explained that while representative offices will not be allowed to carry on banking or financial business, they can offer services that can stimulate foreign direct investment by connecting capital investment opportunities.
The proposed legislation will also introduce regulatory oversight to ensure accountability in setting fees and charges for services offered by licensed financial institutions. The Head of State, “This is aimed at keeping the market fair and engendering financial inclusion.”
Another significant amendment involves removing the requirement for banks to consult with the Minister of Finance before making regulations that define financial business activities. “We are further removing powers from the Minister of Finance and we are empowering the bank, giving the bank more independence,” Ali noted.
Additionally, the new framework will eliminate the need for ministerial consultation prior to issuing or refusing licenses under the Act. The amendments will facilitate more effective consolidated supervision and cooperation among supervisory authorities, allowing for the inspection of subsidiaries and representative offices in Guyana.
The legislation will also increase administrative penalties to encourage full compliance by financial institutions with statutory requirements and directives from supervisory authorities.
“It will increase the sanctions which can be imposed by way of administrative penalties with the aim of encouraging full compliance…” the President said.
Moreover, the amendments will create a transfer and vesting mechanism for banking and financial business between licensed financial institutions, subject to approval and a certificate from the governor of the Bank of Guyana. Finally, the legal protection for the governor, officers, and employees of the Central Bank will be strengthened to ensure the lawful execution of their functions.
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