Amended money laundering law no guarantee against blacklisting

Amended money laundering law no guarantee against blacklisting

By Denis Scott Chabrol – Demerara Waves – Tuesday, 28 May 2013 21:44

US Ambassador Brent Hardt

US Ambassador Brent Hardt

United States Ambassador to Guyana, Brent Hardt on Tuesday 28 May, said even if Guyana had amended its financial crimes law, the South American country still risked being blacklisted for doing nothing to prosecute money launderers.

“I think even if legislation had been passed, it would have been still an uphill battle for Guyana because, as we (US) noted in our narcotics report of last year, from the passage of legislation in 2009 to the present time, there have not been any money laundering investigations,” he told Demerara Waves Online News after the opening of a three-day workshop for journalists.  

Hardt had previously told the privately-owned nightly television news, Capitol News, that the anti-money laundering system lacked a vitally necessary entity to spearhead probes in collaboration with the Financial Intelligence Unit (FIU) and the prosecutors.

“You need something between the FIU and the prosecutor to investigate and that’s what has been lacking,” he said. The top American diplomat explained that usually a task force is established to process information and intelligence from that the FIU, Customs Anti Narcotics Unit and the Guyana Police Force. Observations of inexplicable wealth in the form of properties that is not reflected on tax submissions could form part of any money laundering probe, he said.
He on Tuesday explained to DemWaves that the crucial ingredient was not only the 2009 Anti Money Laundering and Countering of Financing Terrorism Act (AML/CFT) but the required system to enforce the law.

“When CFATF looks at the whole regime, it is the structure in place-that’s critical and that’s important- but also what’s happening with that structure? Is that structure being used to conduct investigations, to go after potential money launderers who are out there,” he said.
The opposition A Partnership for National Unity (APNU) and the Alliance For Change (AFC) have similarly criticised government for lacking the political will to prosecute suspected launderers of ill-gotten cash.

Hardt hoped that after the lawmakers would have completed their work, Guyana would have a better framework to prevent money laundering and acquire the institutional capacity “to conduct serious investigations and go after some of the money launderers and big drug dealers.”

Guyana had been set a deadline of May 27 by which the AML/CFT Act would have been amended in keeping with CFATF recommendations. Much to the anger and disappointment of the Donald Ramotar administration, the opposition has insisted that it needed more time to study the proposed amendments in detail in the Parliamentary Select Committee.

Attorney General, Anil Nandlall is this week leading a team to Nicaragua to lobby the Caribbean Financial Action Task Force (CFATF) against deeming Guyana a non-cooperative jurisdiction. The CFATF’s recommendations are expected to feed into a meeting of the global financial crimes watchdog- the Financial Action Task Force (FATF).

The American envoy here said there was no precise idea about how the blacklisting of Guyana would affect ordinary persons. “It would depend on the individual and the nature of their business relations. If they have a lot of international transactions or dependent on money from abroad, they might find it’s a bit more complicated, it takes a little longer,” he said.

Asked specifically if incoming money transfers could slow up, Hardt said “there would be greater scrutiny of transactions coming into and out of Guyana” which could add to increased operational costs.

While Guyana would “not grind to a halt,” Hardt said being blacklisted could be “painful” for government, business and banks.

An amended AML/CFT act would empower the Governor of the Bank of Guyana the right to maintain a list of terrorists, terrorist groups or organisations based on information being provided by the United Nations. The list would be circulated to financial institutions requesting information on whether they have funds in Guyana. The Central Bank Governor would determine whether to continue the transaction or business relationship or submit a “suspicious transaction report immediately and cease all business transactions or business relationship with such a person or entity. The Attorney General can then move to get a High Court Judge to “freeze the funds of the designated entity.”

The terrorism-related entity can ask the judge to review the freeze-order 60 days after it was published in the Official Gazette.
Persons connected to a casino or other gaming entity, according to the amended Gambling Prevention Act, would have to be first screened by the Bank of Guyana for their connections with the underworld. “The Gaming Authority shall assess the integrity of an applicant, partner, shareholder, office holder or an applicant and beneficial owner on the basis of fit and proper criteria on a regular basis.”

In the case of entities governed by the Securities Act, Companies Act and the Insurance Act; the AML/CFT Act is expected to be amended “to prevent criminals or their associates from holding or being the beneficial owners of an interest in or holding management functions” in entities governed by those laws.
The directors and senior management of any company regulated by the Securities Act and carry on business or act as a financial institution shall be certified by the Bank of Guyana, the amendment states.

The law would compel the production or obtain access to all records, documents or information for monitoring of compliance in relation to money laundering, terrorist financing or proceeds of crime laws.

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  • de castro  On 05/29/2013 at 4:31 am

    Very interesting read indeed…with some serious ramifications…politically
    and economically.
    Politically Guyana is stagnant.
    Economically Guyana will survive.

    CUBA has been excluded from trading with USA …Trade embargo
    which has stagnated Cuba internationally yet Cuba survives today.
    Zimbawee suffered similarly financial exclusion but survives today.
    My heart goes out to the Cubans and Zimbaweeans who suffer
    from this exclusion by the political decisions of their leaders.
    I understand the reasons why these countries were excluded.
    Today if Guyana and Guyanese are excluded from the international
    community the motive will be political….for different reasons.
    Guyana and Guyanese will survive regardless of its political
    affiliations and it is unfair to “blackmail” them for not wishing
    to “allow” access to their banking institution….BANK OF GUYANA
    central banks have the right to confidentiality like any other
    and can withhold information if

  • de castro  On 05/29/2013 at 5:03 am

    Withhold information if it is not a security risk to any affiliated sovereign state.

    Money laundering may be such a risk and ccommonnsence prevails
    whether it should be withheld or shared…
    David Cameron is pushing for this “act of disclosure” at his Charing
    of G8 conference for economic rather than political reasons.
    Corporations avoid/evade paying Taxes on profits made
    in UK by declaring their HQ in countries with the
    least corporation tax…..cite Puerto Rico 1% corporation tax…
    UK its 20% and downward…
    Corporations argue that they pay enough tax internally
    by employees direct taxation via wages.
    But loose out on the argument that they “create jobs”
    CEO of corporations will downside to increase their overall
    “Profits” with many job losses….to countries…
    Corporations are very mobile.
    Cameron’s “dilemma” !
    Having said all that to return to the original subject of Brent Hardt
    Comments re Guyana possible exclusion from the international
    monetary organisation I would challenge his motive for his comments.
    If disclosure by BOG of individuals funds on suspicion of money
    laundering then so be it…..but if the motive is political I strongly oppose
    such disclosures….
    To conclude
    Disclosure on suspicion of money laundering not only by individuals
    but by multinational corporations is a step in the right direction…
    Poorer countries suffer most from loss of Tax revenue received/generated by
    individuals and corporations and any call to tighten these loopholes should be welcomed….openness in operation by information exchange is a step in the right
    direction…way forward.

    My spin entirely as am sure others will “beg to differ”


  • Cyril Balkaran  On 05/31/2013 at 7:19 am

    The World Bank and the IMF are major financing World Institutions and they are Privy to any Secret the Banks may hold. especially if the Counrt is a reciepient of world bank or imf monies. How did GENEVA where the Swiss Bank exist and operates was able to tell India and its Governemnt who are the Billionaires in India holding US accounts tax Free. The Swiss Bank has over the years changed some of its rules re secret Accounts of the world leaders also and so you must now pay the taxes and come to live in Sweden for x months in order to withdraw X millions.Money laundering brings in large profits to banks in the Caribbean and Panama and other small Island States and especially places where no repatriation treaty exists between Governments. Why then should Guyana be blacklisted by any Anti Money laundering Institution for not having laws to operate as “Episonage in the Banking Systems” in Guyana. Where else do we know for sure that such laws exist and are fully functional. There is no Government in the Caribbean that will pass legislation to take 25 % after TAX declarations form any financial institution to deal with POVERTY in their countries. The Banks as Institutions take the people’s monies, invest it make huge profits, pay their staff fat salaries with purks and to hell with the rest of the world around them. The failure of Governments to handle the fiscal policy in any country is due to a lack of foresight. Money is needed for development and you must go after the Financial Institutions who show us how successful they can become!

  • de castro  On 05/31/2013 at 8:27 pm

    Sorry buddy I “beg to differ” for following reasons……
    1. Banks are in business to “make profit” …
    2. Banks accept deposits and lend to businesses /individuals
    at a profit…higher rate of lending than borrowing.
    3. Banks and their CEO s play “monopoly” with shareholders/
    savers/investors money ….gamble for profit.

    There are two kinds of banks…
    Investment…IMF World Bank et All….
    Utility banks ….national….HSBC Barclay’s et all..

    My issue with the banking institutions is simple…
    If they profit internally/nationally they must pay Taxes on their profits
    made in the host country.
    If they profit externally/internationally they must also pay Taxes on their
    profits made in the host country.
    By declaring their HQ in the most favourable corporate tax havens
    they reduce their tax burden and increase their profits.

    International agreement on this issue is not only improbable but
    almost impossible…..who will pick up the tab for monitoring/enforcing.

    UK and EURO guarantees savers up to a limit on their deposits
    if the bank goes under….bancrupt. TAXpayers foot the bill.
    UK BOE went one further by seperating “utility”from “investment” banking….
    to safeguard savers and taxpayers from loosing their deposits
    and/or taxpayers picking up the bill.

    Money printing (quantative easing) banking jargon ….is the function of
    central banks…BOE FED etc …which they sell as bonds in the markets…
    to raise money for future investments by government.
    The German bond rate is one of the lowest in markets…
    these rates are available on Google if interested….UK and Switzerland
    not far behind….

    If the markets think a country bonds are safe they will invest in them…
    If that confidence is eroded they will not buy their bonds.
    The rates of interest paid to investors will vary by demand/supply
    in principle but politics does have a big influence in the decision
    on where to invest.

    I do support the “FREE MARKET” principle but question how it is practiced.
    Rules must not only be implemented it must be enforced….
    Agreement on how is the question…who pays for it.

    A dilemma for bankers and governments to resolve.


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