The Private Sector Commission yesterday implored members of Parliament to come to an agreement on the anti-laundering bills and accused them of self-serving agendas.
The PSC statement follows:
The recent public statement issued by CFATF on Guyana as a “Jurisdiction with strategic AML/CFT deficiencies that has not made sufficient progress in addressing the deficiencies or has not complied with the Action Plan developed with the CFATF to address these deficiencies” issued on May 26, 2014 and the referral of Guyana to FATF is very disheartening to the members of the Private Sector Commission.
The Private Sector Commission is of the view that this situation could have been wholly avoided if our elected officials in parliament collectively acted in the interest of the country rather than in their self-serving political agendas.
The counter measures called for by CFATF as a result of the non-compliance to international AML/CFT standards will reverse the progress made by the Private Sector over the last 10 years. Loans and advances to the private sector by the commercial banks is one of the reliable indicators of private sector growth and investments. This was $40.8B in 2004 and rose to $128.2B at the end of Dec 2013. At the end of the first quarter of 2014, the balance dropped to $127.5B and has been stagnant for the last 3 months. This is a sign that there has been a decline in the investments made by the private sector. This is linked to a lack of confidence and a high level of skepticism by private enterprises in the economy due to the uncertainties brought about by the possibility of sanctions.
Guyana is already ranked poorly in many international indices such as the World Bank Doing Business Report and the World Economic Forum Global Competitiveness Report and the referral to FATF only worsens this situation.
The countermeasures called for by CFATF “which could entail, among others, the requirement of enhanced due diligence measures; introducing enhanced reporting mechanisms or systematic reporting of financial transactions; refusing the establishment of subsidiaries or branches or representative offices in the country concerned, or otherwise taking into account the fact that the relevant financial institution is from a country that does not have adequate AML/CFT systems and limiting the business relationships or financial transactions with the identified country or persons in that country” once fully implemented by countries that are trading partners with Guyana can significantly weaken our economy and reverse the gains made in poverty reduction.
It must be clearly understood that the classification of Guyana by CFATF and the referral of Guyana to FATF lumps both legitimate and illegitimate businesses of Guyana into the same high risk category. Legitimate law abiding businesses are going to feel the consequences even more as money launders and financiers of terrorism will continue to find sophisticated methods of by-passing the system as they are good at scheming and plotting and they would not mind the extra cost associated with doing so. However, legitimate businesses have no alternative but to comply with the onerous systems and bear the extra cost. For this, the consumer will eventually suffer as business models are built to pass on and recover costs fully.
The Private Sector Commission is pleading once again to the elected officials of the country to work with each other to arrive at a solution for Guyana to meet the legislative requirements of an effective Anti-Money Laundering and the Countering of Financing of Terrorism Regime before the June 2014 Plenary Meeting of FATF in Paris.