The decision by a Caribbean financial body to encourage its member countries to consider implementing counter measures to protect their financial systems from the “ongoing money laundering and terrorist financing risks” emanating from Guyana is most unfortunate, Minister of Finance, Dr Ashni Singh has said.
“As a result of this warning Guyana’s credibility in the international community will be severely damaged. International business relations with Guyana will be subjected to intense scrutiny which inevitability will become bureaucratic and costly for investors. Such environments will undoubtedly detour investor interests and ultimately limit Guyana’s marketability,” the minister said in a statement issued yesterday.
On Thursday, the Caribbean Financial Action Task Force (CFATF), after assessing Guyana during its 38th Plenary in The Bahamas, decided that the country is insufficiently compliant with prescribed anti-money laundering and terrorism financing requirements and therefore called on its member countries to consider taking measures to protect themselves from risks emanating from Guyana. CFATF has also asked Guyana to correct the existing deficiencies in its financial architecture by May 2014 or be referred to the global body, the Financial Action Task Force (FATF).
Yesterday, Singh said that countries which have been “blacklisted” and received similar warnings have responded differently based on their unique economies. “How Guyana’s economy responds will only be determined in time. What is known is, regardless of Guyana’s current economic state, the consequences of the warning issued by CFATF are far reaching,” he said.
Specifically, according to the minister, consequences will include:
* Persons who receive remittances/ cash via money transfer systems, may experience delays in receiving the transfer. There may also be an increased processing fee resulting from additional paperwork.
* Proof of income and identification of the sender of such remittances will be enhanced. Persons most likely to be affected by this are undocumented aliens who reside abroad.
* The transfer of money from local to external banks will be delayed as international banks begin to (sever) ties locally.
* This delay in bank transfers or severing of financial ties with local banks can affect fuel prices and ultimately the cost for travel and commodities.
* Local businesses may experience delays in the shipment of goods as additional paperwork will be required to prove that a business is legitimate and not a shell company laundering monies or financing terrorism.
* Enhanced scrutiny will be implemented to verify the source and destination of all monies.
* Persons who shop online and use debit and credit cards to conduct such transactions may find their transactions are denied or delayed.
* Insurance services (fire, life, mortgage etc), most of which depend on reinsurance from abroad, are also expected to experience delays, additional filing of paperwork and possibly increased fees.
Officials have been urged to stick to the language CFATF used in outlining its position and advised to be hesitant to describe the posture taken by CFATF to Guyana as a blacklisting. Anti-money laundering specialist and attorney Toussant Boyce has said that all stakeholders have an ethical obligation to describe Guyana’s condition in the same manner it has been described by the CFATF.
Following the CFATF release, government officials, including Prime Minister Samuel Hinds and Government Chief Whip Gail Teixeira, said that CFATF’s decision is indicative of a blacklisting. Government ministers Anil Nandlall, Singh, and Juan Edghill, during the November 14 sitting of the National Assembly had also said that Guyana would be blacklisted without a doubt if the Alliance for Change (AFC) and A Partnership for National Unity (APNU) did not lend their support towards passing the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill proposed by the government in April of this year.
Yesterday, Singh said that despite numerous warnings, multiple engagements, calls from the private sector, manufacturing industry, banking and insurance sectors and the diplomatic community, “it is most unfortunate that Guyana’s development has received such a striking blow due to non- cooperation at the parliamentary level.
“The implications of Guyana not complying with the CFATF requirements will undoubtedly affect our social and economic development,” he said adding that as more information becomes available, government will keep the public informed.
