Caribbean Financial Action Task Force (CFATF) requirements for anti-money laundering legislation are only a “floor” and the country is free to amend the law in order to strengthen it beyond what exists, CFATF adviser Roger Hernandez told a parliamentary committee on Friday, according to APNU’s spokesman Carl Greenidge.
Hernandez told the parliamentary committee that nothing that the CFATF has said about the draft anti-money laundering bill should be taken to mean that they believe that the National Assembly cannot pass legislation it deems fit, Greenidge said. The CFATF official also said that as far as changes to the draft bill are concerned, the Assembly should recognize that those changes could either strengthen or weaken the Bill. CFATF will take a position on this after the legislation is approved and can be assessed in the context of Guyana and its peculiarities. There can be no in-principle objection to changes, Greenidge told Stabroek News.
Hernandez was here to brief the parliamentary committee examining the stalled Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) (Amendment) Bill, and told a news conference afterwards that as proposed now, the bill itself without any additional amendments is compliant with the recommendations that were made concerning Guyana meeting the AML/CFT standards. He had also expressed concern about amendments to anti-laundering legislation proposed by APNU as he said that some of the amendments that have been put forward deal with previous areas of the Act that were deemed compliant. “The concern that we have is that the amendments being put forward may make those areas that were formerly compliant, non-compliant. There is a risk with that,” he said.
Attorney-General Anil Nandlall emphasized yesterday that Hernandez in a “most crystal” fashion pointed out that were changes made to aspects of the law that are already compliant, Guyana runs the risk of becoming non-compliant and the next result of a review would be the same.
Yesterday, speaking on one of these changes, Greenidge said that the 2009 legislation in Part V, Clause 1 of Section 67 allows for the seizure of cash by a police officer or a person authorized by the Financial Intelligence Unit (FIU) and is a PPP measure and the current bill does not remove it from the old law. “The APNU amendment seek to add it to the section of the Act, Section 37 for consistency and completeness,” he said.
He also noted that the opposition has been saying that the legislation needs improved governance in order to be effective. “The absence of governance provisions has been the main reason why Guyanese could out, of the blue in 2013, find themselves threatened with CFATF blacklisting. The CFATF issue is not about legislation; the Government having decided not to enforce its own legislation has blamed the judicial system, lawyers and the absence of adequate laws. But although the CFATF assessment points to the existence of ’robust’ legislation in Guyana CFATF is demanding that it be strengthened. We are all to be punished as a consequence of the PPP’s lack of will to prosecute criminals,” he said.
Civil society oversight body
Therefore, Greenidge said, the process has to be driven by a civil society oversight body and the arrangements for governing the FIU needs to be strengthened so that the institution can be obliged to carry out its functions.
In the discussions, the APNU official said, government said nothing about its failure to prosecute. He asserted that the government has been claiming that the legislation carried in the bill being considered by the Assembly was drawn up by the CFATF and cannot be changed by the Parliament or any other body. CFATF will not approve any changes – in other words CFATF will accept only ‘its’ bill and nothing else. He said that government has also claimed that the CFATF has rules which require them to deal only with ministers and therefore will not accept the introduction of a body answerable to Parliamentarians and CFATF fears that if parliamentarians appoint persons to the FIU, criminals in the community are likely to be included whereas the minister will not be guilty of this. In addition, the claim was made that the FIU has to be autonomous and it cannot be autonomous if it is overseen.
However, in the course of the exchange, Hernandez explained that he was only authorised to discuss the financial issues associated with the AML legislation. “He, in other words, has no power to discuss or challenge the powers of the Parliament or the National Assembly,” Greenidge said.
Hernandez also said that nothing that the CFATF has said about the draft bill should be taken to mean that they believe that the Assembly cannot pass legislation it deems fit and CFATF requirements are only a “floor,” Greenidge reiterated.
In relation to the CFATF position on the autonomy of the FIU, Hernandez said that the overview should not involve interference in the day to day operations of the FIU, according to Greenidge. “It also means that the personnel should be appointed on the basis of clear criteria and specified qualifications and, that the grounds for termination should be specified. There should not be extended periods of acting appointments,” Greenidge reported Hernandez as saying.
He related that Hernandez was asked by the PPP about oversight in other countries and he explained that in the case of Barbados there is an oversight body which actually comprised the heads of the various agencies identified as being responsible for implementation. Notwithstanding CFATF’s rules, appointments to the Barbados FIU were not made by the head of the FIU but by the Public Service Commission and that exception was accepted because PSCs were a recognized feature of Caribbean public service employment inherited from the British system, Greenidge said.
He said that the opposition members felt that Hernandez did not recognize that Guyana’s legislation and constitution equally provided, just as in the case of the other Caribbean territories, for service commissions but in Guyana these bodies had for years been ineffectual and more importantly they had not been properly constituted, hardly met and in one case the wife of a Minister with no particular qualifications chaired it.
“In Guyana, appointments to Constitu-tional Offices are made by the Parliamen-tary Appointments Committee. The idea that the Assembly has neither the experience nor Constitutional capacity to vet appointments are absurd,” Greenidge said.
Realities of Guyana
In citing several examples of officials’ ties to criminals, he said that they trust that in future CFATF assessors would be less wowed by the apparently gregarious and polite Ministers and their officials and they would see the need to pay attention to the realities of Guyana.
“The question of autonomy was not mentioned in the CFATF 2012 assessment as being in need of attention. Both the Government representatives and Mr. Hernandez pointed this out. The inference was that the Assembly need not have worried about it. But it is precisely because the Opposition is aware that the FIU, like the enforcement agencies such as the Police, are not autonomous. A large part of the reason for the complete absence of prosecutions is instructions to agencies to release vessels and persons implicated in predicated activities,” Greenidge said.
“Mr. Hernandez explained that this matter was not mentioned because in 2012 the FIU had only one staff member so the question of mode of appointment had not arisen. This does not of course explain why the legislation governing the appointments was not examined,” he declared.
In referring to the legislation governing the appointment of the FIU head, Greenidge said that the qualifications specified in the legislation are so general as to allow for anyone who has been near a bank or an economics book to meet the requirement.
This is precisely why the APNU had in the past explained to CFATF that while they have the utmost regard for CFATF’s expertise, their local knowledge informs that given the way in which local organisations and persons with authority work, not every piece of model AML legislation will secure effective implementation, he said.
There is a need additionally for far- reaching organisational changes and a more public (National Assembly- driven) oversight of a coordinated national body/task force dedicated to accomplish the goals of CFATF, Greenidge said. “We are even more firmly convinced of the accuracy of our views having heard Mr. Hernandez on the question of autonomy of the FIU and the issue of oversight,” he added.