Guyana is on FATF’s list of high-risk and non-cooperative jurisdictions

–remains “high risk” destination on FATF’s list despite US quibble

Regardless of the phraseology utilised when debating the issue, the fact remains that Guyana is still noncompliant with the Financial Action Task Force (FATF) requirements and by extension, the Caribbean Financial Action Task Force (CFATF) requirements.

In common parlance, Guyana was “blacklisted” by the Caribbean Financial Action Task Force (CFATF) after it failed to make significant progress in implementing required legislative reforms which would have aided in the international combat against money laundering and financing of terrorism.

Since being rendered “blacklisted” by CFATF, Guyana still has not made any significant progress towards achieving all the requirements set out by the international body. Therefore, with all technicalities aside, Guyana is CFATF blacklisted.

Eventually, amid the then Opposition’s objections to passing the People’s Progressive Party/Civic (PPP/C) proposed Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Amendment Bill, CFATF felt that they could have no longer influenced the improvement of Guyana’s situation and the matter was subsequently referred to the wider body – FATF.

Though Guyana does not appear on FATF’s “blacklist”, the country appears on the international body’s “high-risk and non-cooperative jurisdictions”.

Nevertheless, a quick Google search would show that the FATF “blacklist” is the common shorthand description for the international body’s list of “high-risk and non-cooperative jurisdictions/territories”.

Guyana Times reported on October 27 that “Guyana remains on FATF blacklist” and based on interpretation of the terminology, it means that Guyana is still noncompliant with FATF’s requirements or is still identified as a FATF “high risk and non-cooperative state”.

According to a recently published FATF report, Guyana, despite the progress made, is still non-compliant with its recommendations.

“Since June 2015, Guyana has taken steps towards improving its AML/CFT regime… However, the FATF has determined that certain strategic deficiencies remain,” an excerpt from the report stated.

The argument remains therefore that the assurances from Attorney General Basil Williams and former United States ChargÉ d’Affaires Bryan Hunt that Guyana will become compliant following the passage of the A Partnership for National Unity/Alliance For Change (APNU/AFC) own version of the AML/CFT Bill were premature, inaccurate and misleading, since to date, Guyana is not fully compliant with FATF requirements.

After the Bill was finally passed in Parliament and became law this year, the Attorney General issued a statement which read “Guyana is now fully compliant with the FATF’s requirements.”

Based on the FATF’s report, this declaration, by any interpretation, is premature and inaccurate since Guyana still has “deficiencies”.

The former US ChargÉ d’Affaires also sought to assure the Guyanese populace that Guyana would become fully compliant with FATF’s recommendations following the passage of the Bill.

On July 7, 2015, at a reception which the United States in celebration of its Independence Anniversary, US ChargÉ d’Affaires was quoted in another section of the media as saying, “Tonight, I can offer my Government’s sincere congratulations to (Prime Minister) Nagamootoo on the parliament’s recent passage of fully compliant legislation.”

However, the United States Government (USG) is boldly contending that its former ChargÉ d’Affaires’ comment was taken out of context. In an article published in the state-owned newspaper on October 29, the US Government posited that Hunt’s statement did not imply that legislation alone would address all FATF and CFATF recommendations.

“To suggest, as the Guyana Times has, that our backing for passage of such FATF/CFATF-compliant legislation meant that the USG believed no further action on AML/CFT was required by the Government of Guyana is a wilful mischaracterisation of the USG position, created through an out-of-context use of USG officials’ quotations. At no time did USG officials suggest or imply that legislation alone would address all FATF and CFATF recommendations,” the US Government is quoted as saying.

Nandlall’s position

Meanwhile, contacted for a comment on the issue, former Attorney General Anil Nandlall explained that in November 2013, CFATF found that Guyana did not implement its action plan adequately; in particular, that Guyana failed to approve and implement the required legislative reforms. Guyana was mandated to pass the relevant legislation to address certain identified deficiencies. Countries were called upon “to consider implementing counter-measures to protect their financial systems from ongoing money laundering and terrorist financing risks emanating from Guyana”.

Further, he added that in May 2014, again, the CFATF found that Guyana failed to make significant progress in addressing those deficiencies and in its public statement on Guyana, said “CFATF considers Guyana to be a risk to the international financial system. 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.

Nandlall explained that countermeasures could entail, among others, “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 the country concerned, or otherwise taking into account the fact that the relevant financial institution is from a country that does not have adequate AML/CFT systems and limiting the business relationships or financial transactions with the identified country or persons in that country”.

Fast forward to October 2015, Nandlall said while some progress has been made, Guyana’s status has not changed. “FATF in its October 23rd 2015, statement confirms that Guyana continues to suffer from certain identified strategic deficiencies. Therefore, Guyana continues to “be a risk to the international financial system” and the counter-measures which can be taken against Guyana as advised by CFATF on the 29th of May, 2014, still remains,” he posited.

Nandlall also contended that Hunt’s statement suggested, as was arguably understood by most, that Guyana became fully compliant following the passage of the Bill.

“I am not sure who misinterpreted what or who misquoted whom. What I do know is that having read what Mr Bryan Hunt has reported to have said in the local press, I formed the impression that the US was of the view that with the passage of the AML/CFT Bill 2015, Guyana became compliant with the requisite international standards and that the hitherto identified strategic deficiencies were rectified and remedied,” Nandlall stated.

Chain of events

Moreover, in explaining the chain of events leading up to the present situation, Nandlall had told Guyana Times that specific directions were given and his Government precisely followed those directions and crafted the relevant amendments and regulations to the law.

“We did that and we forwarded that up to the examining bodies and consultants both at Caribbean Financial Action Task Force (CFATF) and American Regions Review Group (AARG) and at both levels we were told that our amendments were compliant and that our regulations were compliant,” Nandlall stated.

The new Government while in Opposition had put forward certain amendments which would have rendered Guyana noncompliant and which would have put Guyana through further scrutiny owing to the implications of those amendments, Nandlall explained.

He said APNU/AFC’s version saw the possibility of certain aspects of Guyana’s law that was already compliant becoming noncompliant. Also, he said, some aspects of the proposed amendments conflicted with the recommendations Guyana was specifically asked to implement.

“We drew that to their attention whilst we were in Government but they used their majority in the Select Committee to frustrate our efforts in passing the compliant version,” Nandlall stated.

Nonetheless, the former Attorney General related that his Government submitted APNU/AFC’s version to the CFATF, but even it pointed out that the document was noncompliant with the recommendations.

“They pointed out that those weren’t the directions given and that those amendments being proposed put the country in further problems… CFATF said that to us in writing. We submitted that letter to the Select Committee and the majority of the Select Committee was still not persuaded, even by CFATF to that effect. So they maintained their position stubbornly and when they became the Government, they passed it through the Parliament in one sitting, they forced the amendment through in the absence of an Opposition,” Nandlall related.

Meanwhile, according to the FATF report, Guyana should continue to implement its action plan by ensuring and implementing an adequate legal framework for identifying, tracing and freezing terrorist assets; ensuring a fully operational and effectively Functioning Financial Intelligence Unit (FIU); establishing effective measures for customer due diligence and enhancing financial transparency; and implementing an adequate supervisory framework.