Money launderers prosper as information sharing languishes
-1992 US/Guyana agreement has zero effect
Stabroek News
March 19, 2004
President Bharrat Jagdeo recently called for the United States and Guyana to exchange information on corrupt government and private sector officials.
Jagdeo said many individuals open overseas accounts to avoid taxes and for money laundering purposes. He said it was this reason that the government was pushing for a bilateral agreement with the United States. "I would like to move forward with the US to have a bilateral agreement which could be negotiated."
However, legislation based on such an agreement already exists. Then Minister of Finance Carl Greenidge and then United States Ambassa-dor, George Fleming-Jones, signed a Tax Exchange Information Agreement (TIEA) in July 22, 1992.
The agreement has had little if any effect given that the US State Department 2003 report stated that money laundering in Guyana was largely fuelled in part by narco-trafficking.
The Income Tax (Exchange of Information) Act states, "The competent authorities in the contracting states shall exchange information to administer and enforce the domestic laws of the contracting states concerning the taxes that the agreement covers." Other areas are meant to assure the accurate assessment and collection of taxes with the aim of preventing fiscal fraud and evasion, and to develop improved information sources for tax matters.
The legislation says that information can be exchanged to fulfil the purpose of the agreement without regard to whether the information relates to, or is held by, a resident or national of a contracting state.
Back then, Ambassador Fleming-Jones said that the agreement would help the authorities to keep tabs on the accounts of suspected narcotics dealers who launder money all over the world. He did say, however, that the exchange of information would not have been spontaneous, meaning it would have to be requested. This suggested that not everyone with overseas accounts would be automatically targeted.
Ten years ago Fleming-Jones had said that the agreement would make sure that Guyana does not become a haven for money laundering activities. He had indicated too that the agreement was geared to detect and curb other forms of tax evasion in the United States and Guyana.
The legislation says the requested state must endeavour to provide information upon request by the applicant state, and if the information in the tax files is not sufficient, the state should take all the necessary measures to provide the applicant state with the information requested.
The law says that any information received by a contracting state shall be treated as secret in the same manner as information obtained under the domestic laws of that state. It can be disclosed only to individuals or authorities, inclusive of judicial and administrative bodies, involved in the collection of claims. The information may be disclosed for court proceedings or judicial decisions.
Chartered accountant Christopher Ram said that people should declare all of their overseas accounts when filing their tax returns since all income from these accounts are taxable, according to Guyana law. He said also that he could not recall an instance where the agreement was invoked in the indictment of anyone suspected of having laundered money or being involved in the drug trade. "My concern is whether the President's comments took account of the TIEA signed by the United States and Guy-ana," he said, adding that the agreement provided the framework for achieving the very objectives that the President referred to.