Government Information Agency
GEORGETOWN (GINA) — The recent announcement by the Caribbean Financial Action Task Force (CFATF) that Guyana has been recommended to the Financial Task Force, the internationally recognised body which deals with regulatory framework of signatory countries seeking to prevent money laundering and financing of terrorism was predicted and anticipated by numerous stakeholders.
This path, however, began years ago and has now culminated in a decision which will have serious consequences for not only the local financial sector, but also the regional one. To understand this, one must return to the genesis of an issue, that most of the world has come to recognise as a burgeoning problem that will negatively affect the lives of people across the entire spectrum of society.
The rise in the illegal narcotics trade and terrorist incidents such as the events of Islamic terrorist attacks on the infamous September 11, 2002 dubbed 9/11 sparked a major re-think of threats facing the democratic world. One of the strategies adopted by many countries was to combat the source of funding for those seeking to conduct illegal activities. These threats were recognised since the previous decade with bodies such as the Caribbean Financial Action Task Force (CFATF) being formed. CFATF is an organisation of 29 states of the Caribbean Basin, which have agreed to implement common countermeasures to address the problem of criminal money laundering. It was established as the result of meetings convened in Aruba in May 1990 and Jamaica in November 1992.
In Aruba, representatives of Western Hemisphere countries, in particular from the Caribbean and from Central America, convened to develop a common approach to the phenomenon of the laundering of the proceeds of crime. Nineteen recommendations constituting this common approach were formulated. These recommendations, which have specific relevance to the region, are complementary to the additional 40 recommendations of the Financial Action Task Force (FATF), established by the Group of Seven at the 1989 Paris Summit.
Lead up to the AML bill
In Guyana, 2002 saw the tabling of an initial anti-money laundering bill, read and passed unanimously by the National Assembly, after both sides of the House recognised the dangers and need for such legislation. The ensuing years resulted in several high level international meetings, with officials agreeing to further amend their laws and regulations to better cope with, and close potential loopholes in the agreed upon legislation in 2013.
President Ramotar took the decision, after being appraised of the need for further strengthening of the aforementioned bill, to institute the formation of AMLCFT (Amendment Bill) no 12 of 2013 tabled on April 22, 2013.
During the debate of the 2013 Budget debate, President Ramotar and the Leader of the Opposition, along with representatives of the APNU and the AFC met. The president shared copies of the AMLCFT (Amendment) Bill and explained the importance of passing this bill, the reasons for the length of time it took to draft the bill and the CFATF deadlines and consequences if these were not met. The Bill had its first reading on April 22, 2013.
At the second reading on May 7, the Opposition parties demanded that it go to a Parliamentary Special Select Committee (PSSC) or they would defeat it at the vote. This was despite agreement on all sides about the need for the legislation’s proposed amendments. While the two opposition parties have a majority on all parliamentary committees in the 10th Parliament, the government was put to chair this PSSC which was appointed on May 7, 2013.
President Ramotar sent a message to the House appealing to the political parties to work towards the CFATF May 28 deadline. Following this, an urgently called meeting of the PSSC was held. At this meeting, the Opposition moved for a meeting on June 12, thereby ignoring and dismissing the President’s appeal. Guyana therefore, missed the May deadline, and was listed as a country that posed risks to other countries and they should take precautionary measures to protect their systems.
It should be noted that while the first PSCC was established on May 7, 2014, no meeting occurred until August 5, 2013. A scrutiny of the minutes and report of this PSSC will reveal the scanty attendance by opposition members and several scurrilous reasons to boycott the meetings of the committee until different demands were met. During this time, the opposition brought no amendments although they said they had amendments.
The bill was amended by the government to bring it into further compliance with CFATF recommendations and the report was ready on August 5 to go to the August 7 sitting before the recess. The opposition by majority vote on August 5, 2013 adjourned the meeting to October after recess. Guyana was granted an extension by the CFATF, but due to opposition actions, missed the August 17, 2013 deadline.
The PSSC was reconvened in October, 2013 and started to work again. During this time there were no amendments and the government brought the bill and report back to the House on November 7, 2013 for its third reading. This sitting saw the private sector for the first time petitioning the National Assembly, calling for the passage of the bill and the consequences if it was not passed. The Opposition voted down the petition being laid and read in the House. The bill was subsequently defeated on November 7, 2013, leading to Guyana missing another deadline of the CFATF.
The government brought the second AMLCFT (Amendment) Bill no 22 of 2013, back in early December consolidating all the amendments made in the first PSSC. It was debated for the second time on December 19, and the Opposition declared that if the bill was put to the vote they would defeat it. The amendment bill now renumbered as Bill no 22 of 2013 was sent to a parliamentary special select committee, comprising the same members.
The committee started meeting in January and decided to expedite its work to meet another FATF Feb 10, 2014 deadline. It met on February 8 with the committee completing the AMLCFT (Amendment) Bill no 22 of 2013, reaching agreement on the amendments and corrections. It was during this meeting that the Opposition suddenly stating they had amendments and they would bring them the next day.
On Sunday February 9, after the bill was before two committees for over 10 months the opposition presented written amendments to the Principal Act and not the AMLCFT (Amendment) Bill. These amendments were focused on removing the role of the executive and supplanting it with the Speaker and the National Assembly. The Legislature through a parliamentary committee would not only nominate members to a new Authority called the AMLCFT Authority but would also appoint through the Speaker, the Director, lawyer and accountant of the Financial Intelligence Unit (FIU). The third amendment had to do with cash seizures by the police, customs officer and or the FIU.
The President approached the Leader of the Opposition on the morning of the February 10 sitting and proposed that the agreed on February 8 AMLCFT (Amendment) Bill be allowed to go through to the sitting with a proposal to meet some of the Leader of the Opposition’s demands to review the non-assented bills by agreeing to appoint a joint bi-partisan committee. The Opposition Leader said he would consult before any agreement. The PSSC met the same day and the opposition made it clear that unless the bill included the new APNU amendments and the establishment of the PPC the bill would not go back to the house. As a result Guyana missed the latest FATF deadline.
The PSSC decided to invite the CFATF Assessor to come before the committee on February 21, 2014, and the members were advised of the jeopardy Guyana faced by introducing new amendments on areas CFATF had previously found were already in compliance.
Guyana was advised to submit its report to the CFAFT by Feb 28 with the enacted bill for its review at the plenary in May 2014.Members were apprised of what would happen if it did not make the Feb 28 deadline.
Efforts in and outside of the PSSC by the President with both the APNU and the AFC failed on February 26 when the AFC reneged on its Mashramani Day commitment with the Government and joined the APNU in its demands and the APNU added on new linkages to their amendments as a ‘package”, for the bill with their amendments to be passed.
The bill was now held hostage in the PSSC and so Guyana missed the February 28 deadline. The bill is still in the PSSC and the APNU amendments to the Principal Act are the still the subject of discussions.
The last meeting of the PSSC was on March 25, 2014 where the APNU members were making further refinements to their earlier amendments. The PSSC did not meet during the Budget debate which lasted from March 31 to April 17, 2014 where the opposition slashed the current and capital budgets of the Office of President, Capital budgets of the Ministries of Amerindian Affairs, Public Works and Health.
It should be noted that were agreement to be reached, it is not impossible to convene a special sitting. However, the jeopardy is that by a majority the APNU driven amended bill (which the Government believes includes amendments which would not bring Guyana into compliance with CFTAF/FATF standards) could be returned to the House and passed and the issue of assent becomes an issue.
The Head of State has repeated called on the Opposition to pass the amended bill as it is a matter of national importance, one which has serious implications, not just for the business sector but ordinary citizens and the Caribbean as a whole. These calls have been seemingly ignored and as a result, the nation’s financial health faces certain challenges. The blacklisting of Guyana, will have negative impacts on the exchange rates, increase due diligence to verify monetary transactions, particularly those involving overseas clients, higher remittance rates, and higher costs associated with the more detailed information required to conduct business activities.