Guyana flagged for financial risks over stalled anti-laundering bill

The Caribbean Financial Action Task Force (CFATF) has urged its members to consider implementing measures to insulate themselves against financial risks emanating from Guyana, after finding that the country has failed to take sufficient steps to reform its anti-money laundering deficiencies.

CFATF made the announcement in a public statement released yesterday after the end of its 38th Plenary in Freeport, Bahamas, even as Attorney General Anil Nandlall, who was part of the delegation which represented Guyana, disclosed that CFATF decided that Guyana would be advised to address its anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies by May 2014.

“It was further resolved and decided that a formal letter be sent to Guyana advising that should the identified deficiencies

Gail Teixeira
Gail Teixeira

be not satisfactorily rectified, namely the approval and implementation of the required legislative re-forms, by the next Plenary Meeting, that is, by May 2014, then Guyana will be referred to the Financial Action Task Force (FATF) International Cooperation Review Group (ICRG),” Nandlall said in a statement that preempted CFATF’s official announ-cement.

Nandlall added that the Financial Action Task Force (FATF), of which the CFATF is an affiliate, will have its next Plenary Meeting in February 2014, and at that meeting, on its own accord and independent of CFATF, it can select Guyana for its own review.

CFATF also urged similar action by members against Belize. According to the FATF website, on the basis of the results of the review by the ICRG, jurisdictions may be publicly identified in one of the two FATF public documents that are issued three times a year, that is, its “Public Statement” and “Improv-ing Global AML/CFT Compliance: Ongoing process.” In the former, FATF calls on its members and other jurisdictions to apply effective counter-measures to protect their financial sectors from identified territories or to consider the risks arising from the deficiencies associated with each of these territories. In the latter, The FATF on an ongoing basis identifies additional jurisdictions which pose money laundering and financing of terrorism risks to the international financial system. Trinidad and Tobago was being monitored by FATF up until October last year.

 

‘Blacklisting’

 

Notably absent from Nandlall’s statement as well as the statement from CFATF was the explicit blacklisting of the country by the body, which Nandlall and several other government ministers, including Finance Minister Ashni Singh, had said was imminent if the government-proposed Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill was not passed by a November 18, deadline set by CFATF.

The government nevertheless is convinced that the CFATF’s calling on its members to consider taking precautionary measures against Guyana is indicative of being blacklisted. Government has continually warned that foreign financial institutions were likely to sever ties with local operations and the sending and receiving of remittances would become more difficult if the proposed reforms were not passed by the given deadlines. “What the decision does is that by the resolution of the CFATF, any country, any member of the CFATF or any part of FATF can now take measures against Guyana. That’s it. It’s blacklisting,” Presidential adviser and PPP/C MP Gail Teixeira told Stabroek News yesterday.

cfatf1Teixeira further ex-plained that because the CFAFT is not as “strident” in the implementation of blacklisting measures, the process can take some time. Nevertheless, she said that the existing situation was serious.

Prime Minister Samuel Hinds, reading a statement which reiterated much of what Nandlall and CFATF said in their respective statements, told parliamentarians gathered for yesterday’s sitting of the National Assembly that Guyana has been blacklisted and that the country, particularly areas relating to insurance and banking, will be severely affected. If the necessary changes are not made, 98% of which are legislative, he said, “worse may be yet to come.”

Hinds added that these changes are contained in the amendment bill, which was voted down by the opposition two weeks ago.

The opposition, APNU and the AFC, having issues with the bill and enjoying the majority seating in the National Assembly, voted against the third reading of the bill, killing it at last Thursday’s sitting. APNU argued that the bill still was still insufficient in its present state, while the AFC continued to tie its support for the bill to government’s setting up of the Public Procurement Commission (PPC). They had initially attempted to send the bill back to the Select Committee level for further considerations but a procedural conundrum prevented this and so they opted to vote against the bill.

Responding to the news of Guyana’s CFATF evaluation yesterday, Opposition Leader David Granger said the development was deeply regretted but added that main opposition APNU accepts none of the blame for any actions that might be taken against Guyana.

Instead, the government are the ones to blame, Granger charged, while explaining that it was government, in spite of warnings from CFATF since 2011, which procrastinated in taking action on the bill for years.

The government was pushing to have to amendment bill passed before the CFATF deadline, which was an extension that was granted after Guyana missed a May 27 deadline to implement reforms and an August 26 deadline to submit documents saying that sufficient measures had been taken against money laundering and the financing of terrorism. Because Guyana had not taken sufficient steps by its May assessment, the country was found insufficiently compliant by CFATF, and this, again, served as the grounds for being found not sufficiently compliant on Monday.

But the opposition, which has been heavily criticised for stalling the reforms, has pointed out that the matter goes as far back as 2011, when CFATF brought to Guyana’s attention several deficiencies in laws.

CFATF helped Guyana to develop an Action Plan in 2011, which identified target dates to address the deficiencies that it flagged in Guyana’s financial architecture to combat money laundering and the financing of terrorism. But while CFATF acknowledges that Guyana has since made some efforts towards remedying the identified deficiencies, it found that the country “has not taken sufficient steps towards improving its AML/CFT compliance regime by failing to approve and implement required legislative reforms.”

“Guyana must therefore pass the relevant legislation and implement all the outstanding issues within its Action Plan including 1) fully criminalising money laundering and terrorist financing offences, 2) addressing all the requirements on beneficial ownership, 3) strengthening the requirements for suspicious transaction reporting, international co-operation, and the freezing and confiscation of terrorist assets, and 4) fully implementing the UN conventions,” it noted in the public statement released on its website yesterday.

 

‘The political realm’

“The opposition should hang their heads in shame,” Teixeira told reporters as she made her way to yesterday’s sitting of the National Assembly.

Pressed on if and when the government intends to retable the amendment bill, Teixeira said, “You’re assuming we are. When we are? We’ll see. Things are now in the political realm. Let’s see now what the opposition will say about this. The ball is in their court.”

The leaders of both APNU and the AFC have indicated their willingness to allow the bill to return to the National Assembly. However, they are adamant that if the bill returns it must be recommitted to a Select Committee. For its part, the AFC is maintaining that while it will entertain the bill being retabled, its position as it relates to the setting up of the PPC stands.

Nevertheless, both groups might be waiting on the government to take the step since the bill was initially brought to the house by a Minister of Government.

Stabroek News was told by National Assembly Speaker Raphael Trotman that a motion can be moved for the suspension of the Standing Orders to allow the bill to be retabled and he added that this move can be taken by either the government or any of the opposition parties.

Trinidad and Tobago was the subject to FATF’s monitoring under its ongoing global AML/CFT compliance process until meeting its commitments last year.

In a report in the Trinidad Express last October, Prime Minister Kamla Persad-Bissessar was quoted as saying that Trinidad was removed from the dark grey list and would no longer be directly monitored by FATF.

Persad-Bissessar noted that the accomplishment was “no small feat,” and that their Parliament was able to bring and pass “five pieces of legislation, substantive legislation, that was necessary and required by the FATF for Trinidad and Tobago … to avoid falling off the cliff and going into the gloomy depths of a blacklisted country.”

 

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