Guyana money laundering fight ineffective - US
Stabroek News
March 3, 2007
The US Government says that Guyana's anti-money laundering regime is ineffective and the regulations accompanying the Money Laundering Prevention Act are inadequate.
It is urging government to introduce the new proposed legislation on money laundering in Parliament early in the legislative session and also called on the administration to provide greater autonomy for the Financial Intelligence Unit (FIU) by making it an independent unit with its own budget and office space.
In its International Narcotics Control Strategy Report (INCSR) released on Thursday, the US government said that this would enable the FIU access to law enforcement data and ensure that it has the operational capacity to meet the membership requirements of the Egmont Group and other international standards.
The annual report, which has over the years lambasted Guyana's counter-narcotics efforts, said that now that government has moved to make casino gambling legal it should ensure that there are stiff laws to deal with money laundering.
The INCSR report also knocked the central bank, saying that the Bank of Guyana, lacks the capacity to fully execute its mandate to supervise financial institutions for compliance with anti-money laundering provisions. "There have been no money laundering prosecutions to date, and it is unclear if a conviction for the predicate offense is necessary to obtain a money laundering conviction," the report stated. It added that the financial intelligence unit, established within the Ministry of Finance in 2003, is currently a one-person organization and is dependent upon the Ministry for its budget and office space. According to the report although the FIU may request additional information from obligated entities, its analytical capabilities are severely limited by its inability to access law enforcement data and its lack of authority to exchange information with foreign FIUs. According to the US Government, the Guyana Government does not release statistics on the number of suspicious transaction reports received by the FIU, although the requirement to make these statistics available to relevant authorities is mandated by the Financial Action Task Force (FATF).
The report asserted that in order to improve the government's anti-money laundering regime, the FIU has prepared drafts of legislation criminalizing the financing of terrorism and expanding the scope of the money laundering offence. The new legislation is also expected to provide for oversight of export industries, the insurance industry, real estate and alternative remittance systems. The money laundering act failed to make the legislative agenda before the dissolution of Parliament in May 2006.
The Money Laundering Prevention Act of 2000 criminalizes money laundering related to narcotics trafficking, illicit trafficking of firearms, extortion, corruption, bribery, fraud, counterfeiting and forgery. The Act does not specifically cover the financing of terrorism or all serious crimes in its list of offences, the US report said. It added that licensed financial institutions -including banks, securities brokers, exchange houses, credit unions, building societies and trusts - are required to report suspicious transactions to the FIU, although they are left to determine thresholds individually according to banking best practices. Financial institutions must keep records of suspicious transaction reports (STRs) for six years. The law also requires that the cross-border transportation of currency exceeding US$10,000 be reported. The legislation includes provisions regarding confidentiality in the reporting process, good faith reporting, penalties for destroying records related to an investigation or disclosing investigations, and international cooperation. The Money Laundering Prevention Act establishes the Guyana Revenue Authority, the Customs Anti-Narcotics Unit, the Attorney General, the Director of Public Prosecutions and the FIU as the authorities responsible for investigating financial crime.
Home Affairs Minister, Clement Rohee had told this newspaper that the enactment of the new anti-money laundering law was one of the priorities of his ministry this year.
Additionally, the US Government noted that in January this year the National Assembly passed the Gambling Prevention (Amendment) Bill, which legalizes casino gambling. The bill establishes a Gaming Authority authorized to issue casino licences to new luxury hotel or resort complexes with a minimum of 150 rooms. There was vocal opposition to the bill from religious groups, opposition parties, and the public and this included concerns that casino gambling would provide a front for money launderers.
Washington said that the Ministry of Foreign Affairs and the Bank of Guyana continue to assist U.S. efforts to combat terrorist financing by working towards compliance with relevant United Nations Security Council Resolutions (UNSCRs). In 2001 the Bank of Guyana, the sole financial regulator as designated by the Financial Institutions Act of March 1995, issued orders to all licensed financial institutions expressly instructing the freezing of all financial assets of terrorists, terrorist organizations, and individuals and entities associated with terrorists and their organizations. The report said that Guyana has no domestic laws authorizing the freezing of terrorist assets, but the government created a special committee on the implementation of UNSCRs, co-chaired by the Head of the Presidential Secretariat and the Director General of the Ministry of Foreign Affairs. To date the procedures have not been tested, as no terrorist assets have been identified in Guyana, the US report said. It added that the FIU director also disseminates the names of suspected terrorists and terrorist organizations listed on the UN 1267 Sanctions Committee's consolidated list to relevant financial institutions.