As Guyana continues to lag in upgrading its anti-money laundering legislation, regional analysts have added their voices to the call for its passage, while warning of the serious consequences of the failure to do so.
“The implications for Guyana are grave as it could find itself locked out of the global financial network and unable to perform routine international financial transactions. Guyana has the third largest inflow of remittances in the Caribbean, and a consequence of the country’s failure to pass the law could disrupt this important lifeline for citizens, as international banks may be obliged to cease corresponding and remittance relationships with entities in Guyana,” Jamaica National Building Society General Manager Earl Jarrett is quoted as saying in a Q&A in the Inter-American Dialogue’s biweekly Financial Services Advisor newsletter last month, titled “Why Has Guyana Failed to Pass an Anti-Money Laundering Bill?”
In the article, which CFATF posted on its website, Jarrett, Ignacio Alvarez, Of Counsel at Diaz, Reus & Targ, Direc-tor for Latin American at Edgar, Dunn and Co. Jan Smith and
Ronald Sanders, senior fellow at London Univer-sity and former chairman of the CFATF noted Guyana’s position and made offerings.
The passage of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) (Amendment) Bill has been stalled for a year. Guyana has already been placed on a list of non-compliant countries having failed to pass the legislation by November of last year. Nevertheless, it seems as though there has been no measured fallout, although CFATF made its decisions almost six months ago.
Still, ahead of the 39th Plenary of the Caribbean Financial Action Task Force (CFATF), due to be held next month, failure to pass the needed legislation is expected to bring more intense sanctions, as the Financial Action Task Force (FATF) may decide to intervene.
Currently, both opposition parties – A Partnership for National Unity (APNU) and the Alliance for Change (AFC) – have made their support for the amendment bill conditional. Jarrett, however, said, “I submit that of all the laws, the AML/CFT law is not a law to be used for political maneouvring.”
In pointing out the significance of Guyana’s compliance with CFATF recommendations, he stated that “The fight against money laundering and the financing of terrorism depends on a global network of financial institutions which all prescribe to a common standard that verifies the identity of customers, the source of funds transacted over financial networks and the close monitoring of suspicious transactions of any kind.
The Anti-Money Laundering and Counter-ing the Finance of Terrorism (AML/CFT) Act effectively seeks to close the artery which feeds criminal activity and, in many instances, contributes to the murder of innocent citizens. The fight against the use of the global financial network for criminal activity is as effective as the weakest link in this chain of effort. It is therefore important for every nation state, no matter how small, to participate fully by passing the appropriate legislation to allow financial institutions to monitor and report on transactions, as part of their efforts to combat a global scourge.”
‘Historically weak criminal justice system’
Alvarez, meanwhile, pointed out that it was “Guyana’s historically weak criminal justice system” which contributed to the creation of a favourable climate for drug trafficking, smuggling, human trafficking and corruption. He said that these crimes have the propensity to generate large illegal profits, and that CFATF has taken a firmer stance on Guyana because of these realities.
This stance, he said, produced CFATF’s recommendations, some of which are embodied in the amendment bill. He too noted the standoff between government and opposition parties, and warned that “the failure to pass these needed reforms before the May CFATF Plenary Meeting would lead to serious sanctions. This would be devastating to Guyana’s financial services industry, potentially causing international banks to terminate their relationships with Guyanese counterparts.” “For a country whose industry is largely dependent on exporting natural resources, these sanctions could easily cripple the economy, as purchasers for their exports face greater challenges in conducting financial transactions with Guyana,” Alvarez is quoted as saying.
Smith, meanwhile, said “although blacklisting has the objective of making it harder for illegal traders, the heaviest cost will fall on legal enterprises. It will affect the cost of processing international transactions and adversely affect trade and financial flows in the region. It will also affect the government’s provision of goods and services.”
Sanders said if Guyana continues not to adopt the legislation and not to establish other compliance requirements, it will be blacklisted not only by the member-states of CFATF—which has already been done—but also globally by the FATF. “This means that all financial transactions with Guyana will be subject to expensive scrutiny that correspondent banks worldwide would not undertake—some have already closed relations with Guyana’s banks. Businesses, trade, investment and even simple cross border transactions will be adversely affected with consequential harm to the economy as a whole,” he said.
He noted that the parliamentary opposition has refused to pass the AML/CFT legislation unless the government amends it to satisfy their desire for greater parliamentary oversight of its machinery and less authority in the hands of government ministers. He said it has also tied support for the legislation to the president signing into law legislation it has initiated unrelated to the AML/CFT bill. “The two sides are now locked in a power struggle and are failing to compromise in the national interest. Failure to adopt the legislation will not affect other Caribbean countries except that the latter’s banks and authorities will have to scrutinize transactions to avoid contamination that might arise from incidents of money-laundering from Guyana,” he warned.
The select committee considering the bill has not met in several weeks and it is not clear when it will meet again. The last meeting was held in March, before the commencement of the budget debate. Committee Chairperson Gail Teixeira had told Stabroek News that the Chief Parliamentary Counsel Cecil Dhurjon needed to make changes to the opposition’s amendments so they reflected decisions made at the last meeting. She said Dhurjon is to contact the committee when he completes his work so it can again meet. When contacted, Legal Affairs Minister Anil Nandlall, who is one of government’s representatives on the committee, told this newspaper that he was unaware of Dhurjon’s progress, but would inquire.
Meanwhile, APNU MP and committee representative Joseph Harmon says his side is waiting on Teixeira to announce the date of the next meeting. Harmon questioned the time it has taken Dhurjon to complete his work, especially in light of the upcoming deadline. Harmon noted that there is currently little to no movement on the matter, but he suggested that government may become more verbal and animated as the deadline grows closer.