Exactly one year ago, Guyana in an attempt to illustrate to the Caribbean Financial Action Task Force (CFATF) that it was in compliance with most of the measures by which countries’ anti-money laundering actions are evaluated was told that the steps it had implemented were “minimal” and that it remained “in expedited follow-up” with another report due by November of last year.
Most of the amendments in the Anti-Money Laundering and Countering the Finance of Terrorism (Amendment) Bill No. 12 of 2013-introduced by Attorney-General Anil Nandlall on May 7- stem from the recommendations the CFATF would have made in its Mutual Evaluation Report (MER) on the issue of Anti-Money Laundering and Combating the Financing of Terrorism (AMLCFTA) in July 2011.
Some of the concerns and recommendations made in the task’s force report centred on the fact at the time that Guyana’s Financial Intelli-gence Unit (FIU) had only one staff member and the government was reluctant to have the unit give periodic reports that included statistics, typologies and trends. The lack of training for staff members that make up the front line agencies expected to investigate money laundering was also an issue coupled with their meagre wages which the task force said could encourage corruption.
Guyana responded to some of the recommendations made pointing out that some of the issues were addressed in other laws outside of the money laundering act but the task force noted that while the authorities in Guyana had commenced complying with some of the recommendations the measures were still minimal.
“There is need to formulate specific measures on a priority basis with timelines for the large majority of the recommendations that are presently under consideration,” the task force had said.
Additionally, the task force had said that information with regard to available statistics to demonstrate implementation needed to be submitted.
And so as Guyana scrambles to meet the May 27, 2013 deadline as its failure to do so would see the country being blacklisted with repercussions to follow, critics say the administration is rushing to make last minute changes even though it knew what was required years ago. Guyana joined the CFATF in 2002 and had its first MER in October of 2006.
Some of the key points made in the July 2011 task force’s MER (the actual on-site visit for the report was made in January 2010) were that there was need for additional staff in the FIU, Guyana Securities Council (GSC), Division of Cooperative and Friendly Societies (DCFS) and trained financial investigators in the police service and CANU. It was pointed out that while staff of the DPP need anti-money laundering training, staff at the police, CANU, Bank of Guyana and the DFSC needed both anti-money laundering (ML) and financing of terrorism (FT) training.
“Additionally, there is concern about the integrity of the GPF,” the report said tellingly.
In that report it was stated that the statistics were either not maintained or made available to the assessors.
“Statistics are not maintained on formal requests for assistance made or received by the FIU or the supervisory authorities or the spontaneous referrals, extraditions, mutual legal assistance on other international requests for co-operation…” the report said.
And while suspicious transactions reports (STRs) were maintained they were not made available to the assessors.
It was pointed out that Guyana’s anti-money laundering act introduced in 2009 significantly strengthened the country’s legal framework for combating money laundering however, the act as it was does not provide sufficient time to assess the effectiveness of the implementation. It was pointed out that at that time there was only one money laundering case and at that time the FIU only had one staff member and this severely limited its ability on money laundering and terrorism financing investigations.
Recommendations
The report had recommended that Guyana amend the money laundering offences in the Act to include “assisting any person who is involved in the commission of such an offence or offences to evade the legal consequences of his actions” in accordance with the Vienna and Palermo Conventions.
Also, illicit trafficking in stolen and other goods and smuggling should be criminalized as a serious offence and a predicate offence to money laundering. Also, systems were expected to be put in place to effectively implement the Act and relevant government entities made aware of the legislation and its applicability.
Some of the other “deficiencies” found in the Act were that the definition of property should include assets of every kind, whether tangible or intangible, legal documents or instruments in any form, including electronic or digital evidencing title, or interest in assets of every kind and also terrorist financing offences should extend to any funds, whether from a legitimate or illegitimate source. It was also recommended that a provision should be inserted allowing for terrorist financing offences to apply regardless of whether the person alleged to have committed the offence is in the same country or a different one from where the terrorist(s)/terrorist organisation is located or the terrorist act(s) occurred/will occur.
And while the legislation with respect to restraining and forfeiture orders is comprehensive under the act, the task force said that it was not possible to ascertain if there had been effective implementation as there had been no restraining orders, confiscation orders, production orders or search warrants issued/made under the act. As such it was recommended that the definition of property liable for confiscation in the act be amended to include indirect proceeds of crime including income, profits or other benefits from proceeds of crime and property held by third persons and assets of every kind, whether tangible or intangible. The competent authorities were also called upon to provide resources to ensure the requisite agencies are trained under the recent legislation in order to enable effective implementation.
FIU
At the time of the report the Director of the FIU (Paul Geer) was its only employee but he had access to relevant staff of the Ministry of Finance for support services such as IT, security and cleaning etc. But following the passage of the act, Geer had begun to implement a plan for staffing which included the recruitment of four analysts, a database/IT manager, an investigator and an office administrator. Additionally, plans were well advanced to move the office of the FIU to an adjacent building in the Ministry of Finance compound and it was expected to have a separate outside entrance consisting of a steel door. The unit’s yearly budget was also expected to rise from US$125,000 to US$250,000, the report said.
At the time, the ability of the examiners to assess the effectiveness of the FIU was severely limited as the absence of public statistics concerning suspicious transaction reports made an assessment of the main function of the FIU-the receiving, analyzing and dissemination of such reports, extremely difficult if not impossible. The team, however, was advised that suspicious reports were only submitted by banks and money remitters and no such reports had been disseminated to law enforcement authorities or the DPP for prosecution since the establishment of the unit.
“These facts raise concern as to the effectiveness of the reporting of STRs from financial institutions and the competence of the FIU in analyzing these STRs. However, assessment of these issues is credible only in the context of the total number of STRs received, and analysed in relation to the number of reporting institutions,” the report said at the time.
The examiners concluded that the efficient operation of the FIU would have been significantly affected by the fact that the unit had only one staff member for some time.
It was recommended that the FIU issue guidelines on the manner of STRs reporting to all reporting entities and that a circular to the wider public concerning money laundering and financing of terrorism could also be considered. The FIU was also advised to establish safeguards to reduce the vulnerability of its database. The authorities were also counselled to reconsider their policy regarding the FIU releasing public reports and allow for the issuing of periodic reports which include statistics, typologies and trends.
And while the competent authorities appeared well structured there were some areas that needed attention and most important was the training of the authorities to enable them to effectively investigate offences related to money laundering and financing terrorism.
“Another matter of grave concern is the wages offered to employees of the competent authorities. The wages should be of an amount that attracts the skills and integrity necessary to avoid corruption in these key areas of combating money laundering and financing of terrorism. Some concerns were raised about corruption being present in the various offices,” the report stated.
And while the Integrity Commission Act required that all public officers sign up with the commission it appeared that the knowledge of this was limited since only the heads of the departments and their deputies appeared to be following the code of conduct of the act. As a result individual departments were instituting ethics codes as part of their Standard Operating Procedures.
There were also legitimate concerns about the investigative and judicial processes.
“It is said that files slip through the cracks sometimes. Additionally, there are claims that persons are not satisfied with the police and their investigations,” the report said.
And there is need to be stern with the officers who supervise the ranks as many times files do not contain information on summonses served on witnesses. Additionally, officers were not appearing in court to present cases with charges under their names.
There were also some concerns about the time it took to adjudicate cases as long adjournments are granted at times and defendants are given bail and witnesses do not come to court due to frustration and after a time the magistrate dismisses the case for want of prosecution.
“The courts need to hear matters more quickly and efficiently. Sometimes they are overburdened with too many matters at one time. Sometimes, the officers of the court try to tell the prosecutors which cases are to be brought before the court.”
It was recommended that there be written laws or measures authorizing the police to postpone or waive the arrest of suspected persons and/or the seizure of money for the purpose of identifying persons involved in money laundering or for evidence. Further, there should be a law or measure to allow for the taking of witnesses’ statements for use in investigations and prosecutions of money laundering and financing terrorism and other underlying predicate offences or in related actions.
Trained financial investigators were also recommended for the police and CANU and measures should have been taken to deal with the integrity problems of the force.
