Just as the nation feared…

Guyana has been blacklisted

GUYANA has been effectively blacklisted internationally following the country’s referral yesterday to the Financial Action Task Force (FATF) by the Caribbean Action Task Force (CFATF), the body that blacklisted Guyana regionally last November.FATF’s decision follows a review of Guyana’s progress on Monday, where a local team, headed by Attorney-General and Minister of Legal Affairs, Mr. Anil Nandlall, was present.

The review was in relation to the protection of the international financial system from money laundering and financing of terrorism risks, and the encouragement of greater compliance with standards.

‘Reversing the damage done is not going to happen overnight, and mere passage of this Bill will not make this go away. When the world has been put on notice that Guyana is in default, it will take a lot of work and passage of time to correct this’ – Finance Minister, Dr. Ashni Singh

At the end of its five-day meeting yesterday, CFATF issued a missive advising its members to consider implementing “further” counter-measures against Guyana, some counter-measures having already been implemented

President Donald Ramotar

after November’s blacklisting, to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana, as described below.
The regional body made it clear that Guyana has strategic Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) deficiencies, and has not made sufficient progress in addressing these.
According to CFATF, in a public statement, “As a result of not meeting the agreed timelines in its Action Plan, the CFATF recognises Guyana as a jurisdiction with significant AML/CFT deficiencies, which has failed to make significant progress in addressing those deficiencies, and the CFATF considers Guyana to be a risk to the international financial system.

Dr Ashni Singh, Minister of Finance

“Members are therefore called upon to implement further counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana. Also, the CFATF has referred Guyana to the FATF.”

DETAILED COUNTER-MEASURES

The regional watchdog body went on to detail the counter-measures that can be taken by its members to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana.
These include:
* The requirement of enhanced due diligence measures;
* Introducing enhanced reporting mechanisms or systematic reporting of financial transactions;
* Refusing the establishment of subsidiaries or branches or representative offices in Guyana;
* Taking into account the fact that financial institutions from Guyana that do not have adequate AML/CFT systems and limit the business relationships or financial transactions with the country.

Attorney General Anil Nandlall

In November 2011, the CFATF brought to the attention of its Members certain jurisdictions, Guyana among them, with significant strategic deficiencies in their AML/CFT regime.
With a view to encouraging expeditious rectification of the identified strategic deficiencies, Guyana and the CFATF developed an Action Plan with identified target dates to address the strategic deficiencies that exist in Guyana’s national architecture to combat money laundering and the financing of terrorism.
Back in November 2013, CFATF had said: “Guyana has failed to pass the relevant legislation necessary for it to significantly improve its AML/CFT regime, and therefore has not substantially addressed the outstanding deficiencies…”
But while the government contended that the deficiencies at reference were wholly addressed in the AML/CFT Amendment Bill, it has still not received the support of the combined Opposition — A Partnership for National Unity (APNU) and the Alliance For Change (AFC) — both of whom are calling for certain conditions to be met before they do so.
APNU, for instance, has proposed three amendments that proffer a change to the entire governing apparatus of the Financial Intelligence Unit (FIU), two of which are the removal of the words Attorney-General wherever it appears and replacing it with the acronym, FIU; and vesting a Police or Customs Officer with the power to seize currency from any person, anywhere in Guyana, if those officers have reason to believe that it is the proceeds of crime, or will be used to fund criminal activities. The Party is also calling for President Donald Ramotar to assent to Bills passed in the National Assembly, through the Opposition’s one-seat majority, but as the Head of State was at pains to explain, those calls are unconstitutional.
The AFC, which is fully behind APNU’s position, is demanding the establishment of the PPC (Public Procurement Commission), which the government has agreed to, providing that Cabinet retains its no-objection role in the process; but the latter position has been rejected by the AFC.

‘The entire world recognises the importance of being in good standing with FATF, except the 33 persons who sit opposite us in Parliament. If you speak to anyone in the world, they would say it is a grave matter’ – Finance Minister, Dr. Ashni Singh

With neither Parliamentary Opposition party budging on their positions, the Attorney-General, on behalf of the Government, earlier this month offered them counter-proposals, in the interest of ensuring that the amendments made are CFATF-compliant, and reaching a compromise.
These counter-proposals are being considered by the Parliamentary Select Committee, which has been reviewing the AML/CFT Bill for more than 12 months now, and held its most recent meeting last Thursday, May 22.

NO REVERSAL

Finance Minister, Dr. Ashni Singh, has told the Guyana Chronicle that even if Guyana were to pass the AML/CFT Amendment Bill today, it would not mean a reversal of CFATF’s decision.
“The entire world, he said, “recognises the importance of being in good standing with FATF, except the 33 persons who sit opposite us in Parliament.
“If you speak to anyone in the world, they would say it is a grave matter. The Opposition in Guyana says we are crying wolf; nothing will happen; and no one will be affected.
“The truth is that there are people today who cannot do international transactions; they cannot make international payments; the staff of international agencies here are affected… There are people who are affected right now. There are people who say to me that the cost to send remittances have gone up because of increased scrutiny and greater due diligence.”
Noting that the dismissal of the consequences for Guyana is nothing less than irresponsible, Dr Sinmgh said: “It is irresponsible to say no one will be affected; irresponsible to say that only big businesses will be affected, because big businesses translate to little jobs, and every big business, if you want to treat them dismissively, employs hundreds of ordinary Guyanese; and if a big business cannot execute an international transaction, that affects its workers, its profitability, and its viability.”
He, however, said that though the government remains committed to acting in the interest of the Guyanese people, correcting the damage done by the issuance of CFATF’s missive to its members will not be an easy task.
“Reversing the damage done is not going to happen overnight, and mere passage of this Bill will not make this go away,” Dr Singh said, adding: “When the world has been put on notice that Guyana is in default, it will take a lot of work and passage of time to correct this.”
But, he said, the government is willing and ready to do all it can to reverese the situation. “We are committed to enacting the legislation; to do what we have to in Guyana’s interest, but make no mistake about it, it will not be easy to reverse the damage done by this advisory; and the responsibility for the damage lies with the Opposition.”
As the minister was at pains to explain, international blacklisting goes to the core of Guyana’s financial system, in terms of negative impacts.
“We cannot trifle; we cannot gamble with the integrity of our financial system,” he said. “No responsible leadership should take a position that results in the integrity of a country’s financial system, and a country’s credibility to the rest of the world being tarnished and affected.
“This inflicts severe damage to the credibility and financial standing of our country, and I maintain that no responsible politician would allow this to happen… It is extremely unfortunate that the Opposition refuses to allow a CFATF Bill to be passed through the parliament.”
He drew reference to Belize, which was also blacklisted by CFATF last November, saying that in spite of their ideological differences, the country’s political leaders were able to recognise the importance of compliance with CFATF and, by extension, FATF’s standards and enact legislation.
And because Belizean parliamentarians saw the importance of putting country first, theirs was the sweet victory yesterday when they learnt that their country was given a favourable review by CFATF.
Unfortunately, Guyana was not so lucky, and will now have to contend with the challenges for Foreign Direct Investment, trade transactions, remittance transfers, business operations and even the Man in the Street.

NO SURPRISE
But, as Dr. Singh said, the government was not surprised by CFATF’s decision, given the fact that the opposition chose to ignore all the forewarnings of the risks of not enacting the legislation.
“This is an extremely, extremely unfortunate and calamitous development for Guyana, and I am very disappointed,” Dr Singh said, adding:
“On the other hand, I can’t say that it comes as a surprise to me. For weeks and months, we have been cautioning that our failure to enact this legislation will lead to CFATF taking this position. We have said this ad nauseam, ad infinitum. We have repeated it in public; we have repeated it in Parliament; we have repeated it in the Parliamentary Committee. It was only a matter of time…
“This was the inevitable consequence of the Opposition’s refusal to enact a CFATF-compliant Bill, and the responsibility for this lies squarely and firmly in the hands, and at the feet, of the Opposition.”
FATF’s next plenary meeting is slated for June 23 to 25, 2014 in Paris, France, at which time the international body is likely to put Guyana up for review by its International Cooperation Review Group (ICRG).

(Vanessa Narine)