US credits Guyana for progress in money laundering fight

-but says convictions, more investigations needed

Guyana has made significant progress on the Anti-Money Laundering (AML) front but there is need for more investigations as well as successful prosecutions, according to the recently released United States International Narcotics Control Strategy Report.

“The FIU [Financial Intelligence Unit] referred 21 cases to SOCU [Special Organised Crime Unit] for investigation in 2018. SOCU launched investigations into these and other reports of suspicious transactions, but there have not been any convictions to date. The authorities report non-cooperation by stakeholders with SOCU and lack of capacity within SOCU hinder its success at prosecutions,” the report said.

Guyana was among 82 “major money laundering jurisdictions” which were identified for 2018 in the report that was submitted by the United States State Department to the US Congress on March 28th, 2019. The report pointed out that Guyana is a transit country for South American cocaine destined for Europe, West Africa, the United States, Canada, and the Caribbean. Cocaine is concealed in legitimate commodities and smuggled via commercial maritime vessels, air transport, human couriers, or the postal services, it noted.

It said that Guyana’s National Risk Assessment 2017 found that it has a medium-to-high money laundering risk. Unregulated currency exchange houses and dealers in precious metals and stones are identified as posing a risk to Guyana’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system. Other identified sectorial vulnerabilities include the banking industry and unregulated attorneys, real estate agents, used car dealers, and charities.

With regards to the country’s vulnerabilities and money laundering methodologies, the report said that while historically the primary sources of laundered funds are narcotics trafficking and real estate fraud, other illicit activities, including human trafficking, gold smuggling, contraband, and tax evasion, are also sources. “The licensing policies and procedures of Guyana’s unsophisticated banking and financial institutions increase the risk of drug money laundering,” it added.

Further, the report noted that Guyana does not have Free Trade Zones (FTZs), offshore financial centers, cyber currencies, or economic citizenship programmes but permits gaming, which is regulated and supervised by a Gaming Authority. It was explained that common money laundering typologies include large cash deposits using fake agreements of sale for non-existing precious minerals, cross-border transport of concealed precious metals to avoid payment of the relevant taxes and duties, and wire transfer fraud using compromised email accounts.

It was recognised that efforts were made to pass key pieces of AML laws and regulations. In this regard, the report noted that the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009, Interception of Communications Act 2008, and Criminal Law Procedure Act serve as the primary AML legislative regime.

Additionally the government passed the State Assets Recovery Act, the Protected Disclosures Act, and the National Payments Systems Act in 2018 to bolster its legislative response, the report said, while pointing out that the former provides for asset sharing arrangements.

Of note was the fact that Guyana amended its AML/CFT law and the Guyana Gold Board legislation, and established the National Coordination Committee to be responsible for overall AML policy. The National Coordination Committee is to develop a national AML action plan, the report said, while adding that the National Payments Systems Act establishes payment and oversight mechanisms. The other provisions of the amended law seek to curb suspicious financial transactions, the report noted.

Further, it was disclosed the Guyana has comprehensive Know-Your-Customer (KYC) and Suspicious Transaction Report (STR) regulations, in addition to records exchange mechanisms in place with the United States and other governments.

In the report, Guyana’s efforts to strengthen its institutional response to money laundering through training and capacity building was noted. The government trained 500 financial-sector personnel on AML best practices and the Bank of Guyana reviewed its supervisory policies and procedures for financial institutions and developed standard AML/CFT guidelines for money transfer agencies and currency exchange houses.  “Guyana has strong legislation relating to money laundering, the report said, while noting that its AML legislation covers legal persons and provides enhanced due diligence for Politically Exposed Persons (PEPs).

At the same time, it was recognised that Guyana lacks standardised provisions for secure electronic communications and transactions as well as a national strategic plan for combating money laundering and terrorist financing.

It was noted that the FIU applied for Egmont Group membership in 2011 and, in 2012, received two sponsors. The application is still pending due to amended sponsor requirements. Guyana is working with regional representatives to identify new sponsors who meet the requirements.

According to the report, Guyana has shown a “strong” political will to combat money laundering and, therefore, has made progress on the AML front.

“The government still needs to train the judiciary on matters pertaining to the investigation and prosecution of financial crimes,” the report, however, adds, while noting that a national strategic plan for combating money laundering should be developed and implemented, and legislation enacted for the facilitation and regulation of secure electronic communications and transactions.

“Reporting and investigating entities should also improve their interagency coordination, and the GRA [Guyana Revenue Authority] should report suspicious transactions to SOCU and SARA [State Assets Recovery Agency],” the report concludes.

The Guyana Police Force, the Customs Anti-Narcotics Unit (CANU), the Ministry of Finance and National Anti-Narcotic Agency are also major agencies involved in the anti-drug and AML efforts.

According to the report, Guyana and the other countries were rated based on the actions of the respective governments in 14 areas. These include criminalising drug money laundering, maintaining records over time, monitoring cross border transportation of currency, instituting a system of identifying/forfeiting assets, international law enforcement cooperation and establishing the presence of a FIU. Guyana scored positive reviews for action in each area.

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