Only one of 858 suspicious activity reports reached DPP – FIU

By Kiana Wilburg

The details of Annual Report for the Financial Intelligence Unit (FIU) for the year ended December 31, 2011, leave

Carl Greenidge

many financial critics bewildered, particularly by the fact that out of 858 reports of suspicious activity; only one reached the Office of the Director of Public Prosecutions (DPP). And nothing became of that single case either. The report revealed that as of December 2011, the FIU  commenced receiving monthly threshold reports on financial transactions from four categories of reporting entities; the Guyana Revenue Authority (GRA), Cambio dealers, Licenced Financial Institutions (LFI) and Money Transfer agencies. With regard to the GRA, it made clear that someone who enters or leaves Guyana with foreign currency amounting to more than US$10,000 or its equivalent, has to make a declaration to an authorized office on a “Declaration of International Transportation of Currency” form. As for the cambio dealers, it said that up to the end of 2011, there were nine licenced and active cambio dealers and all purchases of foreign currencies equivalent to or above $400,000 and sales of foreign currencies equivalent to or above $1M were to be reported to the FIU. It said too that there were eight licenced and active LFIs at the end of 2011 and deposits or cash transactions equivalent to or above $2M were reported to the FIU. At the end of that year also, there were five money transfer agencies that were active and all incoming and outgoing money transfers around $200,000 were reported to the FIU. During the year 2011, the FIU received monthly threshold reports from those reporting entities. For GRA, there were 1,077 reports, for cambios, 2,520 and for LFIs – 7,582. There were also 29,713 reports from money transfer agencies. In addition to reporting financial transactions that met the monthly threshold limits, all reporting entities reported “Suspicious Activities/Transactions” as is required and set out in the Anti-Money Laundering and Countering the Financing of Terrorism Act. A suspicious transaction, according to the report, was defined as any transaction that causes a reporting entity to have a feeling of apprehension or mistrust about the transaction. This suspicion may be based on a complex or unusual large business transaction by a customer or unusual patterns of transactions that have no apparent economic or lawful purpose and is inconsistent with the profile of the person carrying out such transaction(s). The report noted that the Suspicious Activity Reports (SARS) received from Money transfer agencies were based mainly on the agency’s analysis of the value, number of and frequency of transactions or clients receiving or sending funds that did not make economic sense for any of the parties involved. For the year 2011, the FIU received a total of 858 Suspicious Activity Reports. There were none from the GRA or cambio dealers but there were 14 from licenced institutions and 844 from money transfer agencies. The report noted too that the figure, 858, included recurring subjects who were reported several times for suspicious activities during 2011.

The DPP, Mrs. Shalimar Ali-Hack

The FIU subsequently requested financial records from local licenced financial institutions on thirty-six (36) Suspicious Subjects/Activities. It noted that six of those requests were made as a result of Suspicious Activity Reports received from local Law Enforcement Agencies. Director of Public Prosecutions, Mrs. Shalimar Ali-Hack had made it pellucid that the more than 800 reports of suspicious transactions were never forwarded to her office. The DPP had said in her letter to this publication that according to the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009, the FIU shall compile a report and send it to the competent authority, if having conducted its analysis; it has reasonable grounds to suspect that the transaction involves money laundering, proceeds of crime or terrorist financing. According to section 2 of the Money Laundering and Countering the Financing of Terrorism Act 2009 “competent authority” means the Director of Public Prosecutions, and includes any person authorized by him/her on that behalf. “The FIU has only sent one such report via letter dated December 21, 2011 from the Director of the FIU. The DPP by letter dated January 9, 2012, responded to the letter stating that the information contained in the Report was insufficient and requested that documents and statements in support of the information in the Report be provided to the DPP. To date, the DPP has not received any response,” her letter had stated. Carl Greenidge, the financial point man of A Partnership for National Unity said that the 2011 FIU report was the last one submitted to the National Assembly in 2013 when the government was trying to get the Anti-money laundering Bill passed. Greenidge said that no explanation was provided as to why the report was late. The economist made the point that reports of suspicious transactions which according to the report, “cause the reporting entities to have a feeling of apprehensiveness or mistrust” seem to be very limited, in that it is mainly in the arena of money transfers that the FIU has received reports of such transactions. “In 2011, the FIU received 14 suspicious reports from licenced financial institutions and 844 from money transfer institutions, apparently other than cambios.  The FIU in turn asked for information from the competent authorities in relation to 36 suspicious activities. That number or ratio is rather appalling,” Greenidge had asserted. The Shadow Minister of Finance reminded that one commentator had suggested that this situation may have been the result of both inexperience in the institutions and lack of analytical competence and key staff in the FIU.