APNU proposal for oversight of Financial Intelligence Unit could weaken independence

-CFATF tells anti-money laundering committee

One of APNU’s proposed amendments to the stalled anti-laundering legislation is not compliant with international-standard recommendations, according to the Caribbean Financial Action Task Force (CFATF), which took a neutral stance on the coalition’s other proposals.

CFATF flagged the main opposition’s proposal for an Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Authority to oversee the operations of the Financial Intelligence Unit (FIU) and to appoint and dismiss its director without parameters, saying it could undermine the independence of the body.

CFATF outlined its positions to the select committee charged with considering the AML/CFT (Amendment) Bill following government’s request that it examine the opposition’s proposed amendments.

On Monday, Legal Affairs Minister Anil Nandlall had said that CFATF, by way of the letter, rejected APNU’s proposals as unacceptable since they were not in accordance with the recommendations of the Financial Action Task Force (FATF).

However the sentiments expressed in the letter tell a story much different from Nandlall’s.

The letter was written by Calvin Wilson, CAFTF’s Executive Director, and before he addressed the proposed amendments, he said that “it should be noted that the FATF standards are minimal requirements and in most instances do not stipulate specific detailed measures. Generally this allows countries to use whatever mechanisms or systems they deem appropriate to implement the standards.”

Wilson also wrote that “countries can also implement measures that impose obligations beyond what the standards require. However, where it is clear that a proposed legislation does not meet the standard this is stated clearly for the consideration of the country.”

On Monday, the Government Information Agency (GINA) reported Nandlall as saying that “CFATF has rejected the opposition’s amendments.” Nandlall said that he sent a covering letter along with a draft of the opposition’s amendments to CFATF in an effort to determine its posture on the matter. “…As I predicted, the CFATF rejected every single one of the amendments that they (APNU) are proposing,” Nandlall reported to GINA.

When it was put to Nandlall yesterday that the content of CFATF’s letter was not as he said it was, Nandlall told this newspaper that his interpretation of the letter informed his statements. Nandlall neglected to quote excerpts from the letter when he made statements to GINA on Monday night for publication. The letter was subsequently made available to public.

 

Undermining the FIU

 

With regard to APNU’s proposal for an Authority to oversee the work of the FIU, Wilson stated that such a system “actively eliminates the operational independence and autonomy (of the FIU) and does not comply with the requirement of recommendation 26.”

To establish the Authority, whose members would be determined by the National Assembly, APNU is seeking to amend Sections 8 and 9 of the Principal Act to take power from the AG and the president and place them in the jurisdiction of an Authority.

According to Wilson, an Authority “is not a specific requirement of the FATF recommendations,’ and he added that such a provision “appears to undermine the autonomy of the FIU.”

Wilson wrote that the criteria of FATF Recommendation 26 stipulates that “the FIU should have sufficient operations independence and autonomy to ensure that it is free from undue influence or interference.”

The letter goes on to state that “the proposed amendment which gives the AML/CFT Authority the power to appoint and terminate the Director and Deputy Director without parameters will raise serious questions about the ability of these officials to perform their functions without undue influence.”

“There is a need to consider whether the proposed structure and membership of the AML/CFT Authority will result in an effective, means of appointing the Director and allow for termination of appointment on the basis of just cause and not allow for undue influence,” Wilson explained.

APNU’s has also proposed an amendment to remove the role of the Attorney General (AG) as the officer with the power to authorise the seizure of assets and other such actions. Instead of the AG, APNU is proposing that the Director of the Financial Intelligence Unit (FIU) hold those powers.

In his letter, Wilson said that “FATF recommendations did not specify any person or competent authority as being required to assume the above role.” He said that “the assignment of such responsibility is at the discretion of each jurisdiction and the CFATF cannot definitively advise any country on any particular alternative.”

Nevertheless, he noted that the Director of the FIU is responsible for “retrieving, analysing and disseminating disclosures of suspicious transactions reports and other relevant information concerning suspected money laundering of financing of terrorism activities,” and said that “countries should consider if the Director of the FIU, given his main function is the appropriate official with respect to resources and qualifications to ensure that entities are listed, evidence is presented to judges in connection with listing and orders by judges in relation to listing are reviewed.”

Wilson said that these functions are usually executed by a country’s AG, who acts as the legal advisor to government on international legal obligations, and pointed out that the above mentioned functions are designated to the AGs in Guatemala, El Salvador and Nicaragua.

APNU’s final proposal would extend powers to police and customs officers to “seize and detain cash (G$10M or more) anywhere in Guyana upon suspicion that such cash is derived from a serious offence, will be used to commit a serious offence, involved in ML or where a false declaration was made, and also giving these same powers to the FIU.”

Wilson said that while this provision is not a “specific requirement of FATF standards, it “is a possible measure that can be instituted to comply with the obligations…” As a result, he said, CFATF will not venture to offer advice indicating a preference.

At the same time, he pointed out to the committee members that such provisions are in place in Trinidad and Tobago, Grenada, and St. Vincent and the Grenadines. He said that the safeguards which exist in these instances limit the initial period of seizure to hours and require judicial approvals for any extensions sought.

As the row over APNU’s proposed amendments continues, the committee is slated to meet again this afternoon to continue their consideration of Nandlall’s counter-amendments. Meanwhile, the CFATF’s next plenary commences next Monday. There may be one last parliamentary sitting next week before the plenary comes to and end next Thursday, although Guyana may have already been assessed, and deemed non-compliant by this time.

The repercussion, according to CFATF officials, will be significant. But opposition groups APNU and AFC, whose support are crucial for passage, have already indicated the even if the bill makes it back to the House before the deadline government must concede to their demands before they give their support to the bill’s passage.

APNU is calling on the president to sign several bills he has refused such, while the AFC wants the Public Procurement Commission (PPC) operationalised.

 

 

 

 

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