This week I shall address the two remaining strategic guideposts in designing a road map for the way forward in dealing with money laundering and related challenges in Guyana.
Guidepost 3: Dimensionality
Fully aware that the Special Select Committee might have focused primarily on the legislative amendments before it, I urge Members however to recognise that the reform of the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 cannot be reduced to a task of legal drafting.
In Guyana money-laundering challenges are multi-dimensional. They are political, in that successful challenges to money-laundering 
require political will from the government; trust and cooperation among the government and Opposition; and, transparency and inclusiveness in the process of tackling this, in order to secure citizens’ participation in a social contract that provides their sustained support towards creating a sound regulatory framework. In this regard an indispensable ingredient is public awareness of the gravity of the threats. Without such awareness there will be little or no support for the efforts of the Select Committee.
The challenges are also economic because money laundering thrives in Guyana’s extensive underground economy. Econometric studies on money laundering reveal its negative impacts on economic growth; financial stability; the financial sector/systems and institutions; and, on capital formation. These econometric studies also reveal that money laundering promotes capital flight, the spread of the underground economy, corruption and other such forms of criminal activity.
The challenges are also cultural and behavioral. Wide swathes of Guyanese society are prepared to accept (tolerate) the pathological degeneration and deviance of societal norms. There are indeed widespread whisperings about inequality and the flaunting display of wealth by some, with no readily identifiable legitimate sources for this, but that is as far as it goes.
As the Kaieteur News Editorial quoted last week reveals, neither do the Authorities seek explanations of sudden displays of wealth. My earlier extended columns on Guyana: the Criminalization of the State argue that the nexus between political elites and organized criminal groups has created a cabal that systematically utilizes its combined influence, power, authority and resources to make the state progressively a vehicle for the pursuit of criminal endeavours.
For this and other reasons, I had gone as far as to suggest this phenomenon represented a new state typology, notwithstanding its bearing resemblance to several other modern state deformations. In a nutshell therefore, this guidepost highlights the grim reality that tackling money laundering and related challenges in Guyana is simultaneously a political, cultural, economic, and social transformative task. This is not for the faint-hearted and non-visionaries.
Guidepost 4: Core Weakness
of Act № 13, 2009
The fourth strategic guidepost requires the Special Select Committee to take its bearings from the core weaknesses of the present Anti-Money Laundering and Countering the Financing of Terrorism Act, 2009. Several systemic weaknesses have been widely acknowledged.
The first of these is those banking, legal and other analysts with whom I have discussed this problem estimate at least 70 percent of the terms and conditions of that Act (which was unanimously passed in the National Assembly) have not been applied! Moreover, there has been little political will to apply it. There is therefore, strong support for the view that there is a significant implementation deficit as far as the 2009 Anti-Money Laundering legislation is concerned. That Act, has been under-enforced and under-implemented (executed), whether by accident or design.
Second, that Act has also failed to adequately diagnose the prevailing regulatory, oversight, and governance environment in Guyana.
Thus the Act places abundant responsibilities in the Offices of the President and Ministers as well as other bodies (Revenue, Crime, Law enforcement and so on) where outside political leadership has routinely trumped their functional autonomy and independence.
Consider the following examples: 1) In addition to lacking functional autonomy and independence these bodies are understaffed and under-financed. 2) With the penetration of criminal elements into the workings of the state, it has become well nigh impossible to design a system for regulating the regulators in the Act. The fact that the Executive does not presently control the National Assembly makes that body an attractive location for “oversight functions”
Thirdly, the one body established in the Act, which is dedicated to combat money laundering is the Financial Intelligence Unit (FIU).
From the outset this has lacked the capacity required to fulfill its tasks. The FIU is distinguished by having no great track-record of effective enforcement of the law; no asset seizures; weak cooperation with other nations; and, little effort at addressing citizens with the status of “politically exposed persons”, as defined in the Act.
Fourthly, the Act does not read (to laypersons) as if it is strategically focused on the areas of vulnerability for money launderers. These are the so-called “choke points” identified earlier: 1) The point at which the illicit cash enters Guyana’s financial system (point of “placement”) earlier defined 2) The points at which transfers are made to and from the legitimate financial system. 3) Cross-border transactions (flows). The Guyana dollar is not worth physically smuggling abroad and this reduces the problem somewhat, but on the contrary, the widespread “currency substitution” that takes place in Guyana compounds the difficulties of tracing laundered funds.
The conclusion presented above conforms to the underlying premise of the guideposts, which is that the progressive criminalisation of the Guyana state 1) Increases the size and scale of the money laundering problem 2) Impels the government to “cry wolf” as the Opposition deliberates on the legislative amendments 3) Drives the increasingly complex multi-dimensionality of money laundering challenges 4) Highlights the systemic weaknesses in the original Act, Number 13, of 2009.
Next week I shall address the markers on the road map for Guyana’s Strategic Way Forward.
