External investigation into GGMC only credible response to gold scandals

Jul 14, 2024 Letters

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Dear Editor,

Coming hard on the heels of the US Treasury sanctioning of the third largest gold company in Guyana over accusations of large-scale gold smuggling, startling revelations were made recently in a statement issued by the Guyana Gold & Diamond Miners Association (GGDMA) alleging the existence of a virtually parallel illegal gold industry in Guyana.

This enterprise they stated involved millions of acres of land under illegal gold licensing arrangements, illegal gold production which is then sold to illegal shops on illegal landings. All of this, the GGDMA claims, is known to the Guyana Geology & Mines Commission (GGMC) and to public servants who benefit from this criminality.

Less dramatic but similar allegations about irregularity and illegality in the gold sector have been steadfastly ignored by GGMC for years. For example, neither the GGMC, nor the Government have responded publicly to any of the actions by the US or the allegations by the GGDMA. Over the past decade, the US and other international Agencies have on numerous occasions sought Government action to address criminality in the gold sector, but without success.

These warnings have been well-publicized in the press, particularly Stabroek News, from which the following references are drawn. In 2022, the local Anti-Money Laundering and Countering the Financing of Terrorism National Coordination Committee (NRA) issued a Risk Assessment Report that identified and summarized for the period 2016 to 2020 the four areas that pose the highest threat of money laundering in Guyana in the following order: gold smuggling (USD2.2bn.), tax evasion (USD19.5mn.), illicit trafficking in narcotic drugs and psychotropic substances (USD13.4mn) and fraud (USD8.4mn). As is clear, gold smuggling is far greater than the next three areas taken together. Other forms of money laundering were determined to amount to US$29 million.

The Risk Assessment Report concluded that “No money-laundering investigations, much less prosecutions took place.”  It also stated that only two (2) convictions occurred over the assessed period resulting in the confiscation of USD 37,554.

The NRA reported in 2016 that 15,000 ounces of gold per week was smuggled out of Guyana.  In 2017, a major gold smuggling racket was unearthed through the US Federal Bureau of Investigation (FBI) which provided Guyana’s authorities with a list of persons who had taken gold to the JFK Airport, New York.

In 2019, the Financial Intelligence Unit (FIU) had recommended that a high-level team be established to do a comprehensive review of trading of the precious metal. In the second half of 2019 the FIU set about to determine whether there was information to support the assumptions that US Dollars traded through the illegal roadside cambios and even legitimate cambios were being used to support illegal gold trade between Guyana and Venezuela during the period January 2018 – July 2019.

“The smuggling was made possible because Customs and other Gold Board documents were recycled along with seals. Hundreds of millions of dollars of profits were being made” the FIU report noted. Nothing came of these allegations.

In light of the above, recent US direct action in the form of sanctions appears to be prompted by the Government’s repeated silence and resistance to acting on their warnings.

In particular, the silent GGMC stands like a remote fortress impervious to allegations and disdainful of providing explanations. The GGMC, it should be emphasized, controls all aspects of the mining industry. It employs sophisticated electronic surveillance of all dredges in the interior. It records where every dredge is and when they move. GGMC also maintains detailed records of all licensing, production and declaration arrangements. None of this information is available to the public in open data formats and easily accessible. Moreover, unlike other government agencies, GGMC is governed by its own Statute and salary scales.

An earlier GHRA press release argued that, “Until that institution is thoroughly and urgently reformed from top to bottom, the scandalous squandering of Guyana’s natural mining assets and systematic undermining of community life of Guyana’s indigenous peoples will continue.”

That release also rejected VP Jagdeo’s comment that “individuals at the junior level of Government must be responsible.” Despite being responsible for over 70% of Guyana’s oil & gold exports, the Agency’s audited accounts from 2012 onwards remained unavailable.

The scale of the national and international allegations of serious mismanagement and criminality rule out any attempt by the Government or the GGMC to mount an internal investigation of GGMC.

Any attempt of this nature will generate deep scepticism, incredulity and distrust.  The only credible response available to the Government of Guyana at this stage is to arrange the hand-over of the entire matter to a team of forensic investigators, with an international component, furnished with a mandate and full authority to examine, investigate and make recommendations on all aspects of the gold industry within a specific time frame.

Executive Committee

Guyana Human Rights Association

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• GGMC, gold scandals, investigation, response, US Treasury

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