Financial Institutions have been warned to stop asking citizens about their political affiliation.
A circular from the Bank of Guyana to all Local Financial Institutions, Money Transfer Agencies, Cambios as well as Insurance Companies, Agents and Brokers has warned the institutions to ensure that in the course of conducting business, customers are not subjected to matters unrelated to their specific transactions(s).
“It has come to the attention of the Bank of Guyana that customers have been questioned regarding their allegiance to /affiliation with any political party,” the Bank notes adding that the conditions governing the issuance of license to these institutions “do not include ascertaining the political persuasion of any customer.”
The document dated August 22, 2019 stressed that “failure to comply with the directive shall result in appropriate action being taken by the Bank.”
Stabroek News has previously reported on claims that insurance companies were asking persons to disclose their political affiliation on policy application forms.
At the time representatives had denied the claims stating that requests for information on links to politically-exposed persons (PEPs) are part of their fulfillment of requirements under the Anti-Money Laundering (AML) legislation.
“It is incorrect to say that anyone has to say if they are for example supporters of ‘X,Y,Z’ political party. No, that is definitely not so,” a representative of Nalico/Nafico told Stabroek News when contacted.
“Politically-exposed persons is a category by itself and that person is required to, under [the] anti-money laundering law, to state, as they would do to any financial institution if they were in this category…so if you state no, then that is it and you don’t have to go into any detail,” the representative who preferred to remain anonymous, added.
Other insurance companies, such as Assuria, gave similar explanations, saying that they in no way wanted to know any client’s political party affiliation but were merely complying with the laws pertaining to PEPs.
A representative of another popular insurance company, who asked that neither she nor her firm be named, said that sometimes clients hear PEP and think they are being questioned along party lines.
In 2015, the AML law was amended to expand due diligence obligations of financial institutions, including insurance companies, and set out guidelines for treating customers who are PEPs.
In particular, Section 15 of the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Act saw the addition of the requirement that “if a customer is subsequently found or becomes a politically exposed person, the reporting entity shall require its senior management to approve the continuation of a business relation with such a person.”
The Act itself defines a PEP as “an individual who is or has been entrusted with prominent functions on behalf of the State, including a Head of State or of government, senior politician, senior government, judicial or military officials, senior executives of State-owned corporations, important political party officials, including family members or close associates of the PEP whether that person is resident in Guyana or not.”
