The issuance of a “cautionary” letter from the Trinidad and Tobago central bank to its commercial banks regarding doing business with Guyana has caused some amount of consternation by the Private Sector Commission (PSC).
In a full-page advertisement in yesterday’s dailies calling on Parliament to approve the necessary measures under the Anti-Money Laundering Countering the Financing of Terrorism (AML/CFT) Amendment Bill, the PSC said too that “some countries are already implementing sanctions” against Guyana.
Such steps have been taken, the body argued, because the country failed to pass and implement satisfactory anti-money laundering legislation. The avoidance of such developments was the reason behind the government’s push to have the AML/CFT Amendment Bill passed earlier this year.
The PSC acknowledged that policymakers have taken steps to address the deficient provisions, but also noted that “Guyana has failed to make sufficient progress in addressing its significant strategic AML/CFT deficiencies, which include legislative reforms.” The PSC also urged parliamentarians to approve measures in whatever form to avoid “disastrous affects” on businesses.
But it is uncertain what this will accomplish considering the postures adopted by the opposition parties – the Alliance for Change (AFC) and A Party for National Unity (APNU). The AFC has tied the Bill’s passage to the setting up of the Public Procurement Commission and since government has made no move to set up the commission it is unlikely that the party will change its position.
APNU on the other hand has argued that fundamental changes need to be made to the Bill. One of the proposed changes, Opposition Leader David Granger has said is the strengthening of the Financial Intelligence Unit (FIU) which, since being set up several years ago, has failed to fulfil its mandate. Further recommendations, Granger said, will be made as the committee charged with scrutinizing the Bill hears additional presentations.
The Bill was tabled in the National Assembly in April and the government was hoping to have it passed by before May 27, a deadline set by the Carib-bean Financial Action Task Force (CFATF) for the implementation of stringent anti-money-laundering laws.
Despite the government’s efforts to have the bills passed before the deadline, the opposition parties voted to send the Bill to a Special Select Committee where it today remains.
As a result, Guyana was given a failing grade when assessed. Nevertheless, an extension was granted. Guyana will now be re-assessed in November, but the country may already be in shallow waters since it failed to meet an August 26 deadline for the submission of documents deemed important to November’s assessment.
Attorney General Anil Nandlall had said that the documents submitted needed to indicate that Guyana had passed and implemented the AML/ CFT Bill. Since the Bill was not passed, he said, Guyana might very well find itself in a precarious situation come November.
Meantime, the PSC advertisement noted that companies in Trinidad have already begun to step up their scrutiny of Guyanese companies with which they do business.
“At the moment, there are reports of companies not being able to reinsure. This will impact upon the ability of persons and businesses to obtain insurance or to be reimbursed in the event of a disaster. Needless to say, the inability to obtain insurance would have a deleterious effect upon those seeking or servicing mortgages,” the PSC’s advertisement read.
Granger noted the possible negative implications of not having the Bill passed by the deadline but maintained that such implications, if they occur, should be attributed to government.
It is government, he said, who did nothing for four years to improve Guyana’s Anti-Money Laundering laws, and then rushed to implement insufficient provisions when pressed by the CFATF. As such, he maintained, the APNU will work to ensure Guyana gets a law with teeth, even if it means not meeting deadlines.
Meanwhile, the PSC said that territories which are found non-compliant by CFATF run several risks, including increased queries from banks regarding customer transactions and beneficial owners. The cost of doing business can also escalate as businesses attempt to offset losses or other expenses due to the increased restrictions and delays.
The PSC said that key corresponding banking relationships may be terminated which can lead to limited means of accessing foreign currency or facilitate cross border payment transactions. It is likely, the PSC said, that persons using credit cards for international transaction will also be affected.
Finally, since the main banking partners for many of the local commercial banks are in the United States of America (USA), the US regulator can impose conditions and can even prohibit US financial institutions from transacting with correspondents in Guyana. Such a development, it is believed, will likely have severe socio-economic impacts on the country.
“The conduct of everyday business and the retention of jobs are at stake,” the PSC warned.