Guyana received a stark warning last month about missed deadlines and the need for a serious approach to addressing deficiencies in its anti-money laundering legislation, ahead of the ongoing 37th Plenary Meeting of the Caribbean Financial Action Task Force (CFATF) where the country’s progress is being evaluated.
The warning was contained in a letter dated April 10, 2013 which the Ramotar administration kept secret until APNU exposed it. The letter rapped the government over missed deadlines and also lamented that despite a visit by the CFATF here on March 4, 2013, Georgetown was still unable to give an estimated timeframe on the required law amendments. Indeed, the controversial amendments were only presented to Parliament on April 22, 2013, 12 days after the warning letter from the CFATF. It was then the government began pressuring the opposition to speedily review and pass the legislation.
The CFATF warned government in the April 10 letter that its International Co-operation Review Group (ICRG) is adopting a very serious approach to ensuring that jurisdictions under its review including Guyana are equally serious in addressing Anti-Money Laundering/Combat-ing the Financing of Terrorism (AML/CFT) deficiencies in their Third Mutual Evaluation Report. The last evaluation of Guyana found that while authorities have started to comply with some of the body’s recommendations, the measures taken remained minimal.
Guyana was listed as the second poorest performing jurisdiction in the Americas and it could be poised to face “significant financial cost” because it has failed to comply with the recommendations unless Attorney-General Anil Nandlall makes a successful appeal for an extension for implementation.
During a meeting in May, 2011, in Honduras, Guyana was placed on expedited follow-up and required to report to every Plenary of the CFATF. A third follow-up report was submitted in November on measures taken to comply with the recommendations and following a review, it was recommended that Guyana remain on expedited follow-up. Guyana was rated partially compliant or noncompliant on 16 Core and Key Recommendations and 25 other Recommendations.
Guyana’s progress is being reviewed this week in Managua, Nicaragua, with the road to the review marked by a string of missed deadlines, little progress, a last minute dash to the National Assembly and a rejected appeal from the President by the opposition-dominated National Assembly who cited the need to fully understand the proposed laws.
The Government Information Agency (GINA) reported last week that government will be seeking an extension for compliance with recommendations to strengthen the anti-money laundering laws, after the administration’s failure to win the opposition’s support to fast-track the passage of amendments ahead of the CFATF review.
Reports on the meeting in Managua thus far are sketchy and Presidential Advisor Gail Teixeira said yesterday that she had no knowledge of at what point of the meeting Guyana would be reviewed. She could not say also if Guyana had already been reviewed.
Meantime, according to information from the CFATF Secretariat, with the completion of all Mutual Evaluation Missions during the Third Round of Assessments the focus for all CFATF Members is the Follow up process and the rectification of all outstanding AML/CFT deficiencies identified in the respective Mutu
al Evaluation Reports. “Considerable attention is also being paid to the speed with which CFATF Members address the strategic deficiencies that pose a threat to the international financial system as identified pursuant to the FATF ICRG criteria, and the sterling work of the CFATF ICRG which mirrors and works in tandem with the FATF ICRG, and seeks to encourage CFATF Members to avoid the attendant perils and loss of international reputation of the FATF ICRG process,” it said.
Twenty three Follow up Reports will be considered as well as the results of the CFATF Technical Mission to Nicaragua and CFATF ICRG Missions to Belize, Dominica and Guyana. Also to be considered would be the current efforts by Antigua and Barbuda in restructuring the Financial Services Regulatory Commission.
With Belize and Dominica facing similar reviews, it is unclear whether Guyana can gain any concessions, particularly if those countries have managed to make progress.
‘Significant’
In the letter last month to President Donald Ramotar, the CFATF warned that Guyana should take cognizance of the next stage in the Enhanced Follow-Up process which will be considered at this week’s meeting and which involves possible countermeasures being applied to the non-compliant country. The relevant paragraph states: “In the context of the application of Recom-mendation 21 Members issuing a formal CFATF statement to the effect that the Member jurisdiction is insufficiently in compliance with the FATF Recommendations, and recommends appropriate action, and considering whether additional counter-measures are required.”
A High Level Mission (HLM) had visited Guyana on March 4 and this report will be among those discussed in Managua. The CFATF had noted government’s political commitment towards addressing the identified AML/CFT deficiencies highlighted in the Third Round Mutual Evalua-tion Report and compliance with the deadlines outlined in the Action Plan agreed with the CFATF ICRG. “However, we must register on the observation in the HLM Report that although the Government of Guyana has provided assurances that it would seek to enact as expeditiously as possible critical legislation that would positively impact a significant number of deficiencies, it could not provide an estimated timeframe as to when this would in fact occur,” the CFATF Secretariat said.
The body said that it noted the assertions by the Attorney-General, the Minister of Finance, and Head of the Presidential Secretariat to refocus the national efforts towards implementing the measures set out in Guyana’s Action Plan according to the scheduled deadline of April 30, 2013 for placing the relevant legislative measures before the parliament. “However, as the HLM Report properly recognizes these must be juxtaposed with the experience of missed deadlines in February 2013,” it said.
“Additionally, this date fails to take into account the decision by the November 2012 Plenary that Guyana, as well as all other jurisdictions within the CFATF ICRG process is required to become compliant with all the core and key recommendations by the May 2013 Plenary and is required to report to the May 2013 Plenary on the state of its reform programme,” it added.
“The HLM Report notes that, with regard to the agencies interviewed, there appears to be little or no coordination or co-operation with regard to their relevant activities and the possible effects for the overall AML/CFT regime. This was most apparent with regard to the legislative agenda being pursued by the Financial Intelligence Unit (FIU) and the Bank of Guyana,” the body asserted.
The CFATF said that it fully supported the recommendation by the HML that this situation be urgently reviewed and resolved by the Guyana government and in this regard they strongly urged that all AML/CFT stakeholders in the jurisdiction including the national community should respond positively to this call.
The CFATF directed government’s attention to the FATF ICRG document ‘Jurisdictions Meeting The Reference Criteria Not Yet Reviewed’ which states that Guyana is the second of the top two jurisdictions in the Americas Region and is a potential candidate for prima facie review if the FATF ICRG agrees that there are particular risks such that a prima facie review should proceed.
“We would like to further impress upon the Government of Guyana that any action taken by the CFATF Plenary in May 2013 would be a significant factor that could be taken into account by the FATF ICRG when it next meets in June 2013 and the outcome could be of considerable importance to the regional and international reputation of Guyana and the operations of its financial sector,” the body declared.
“Furthermore, there will be significant financial cost to the country once Guyana is chosen for prima facie review by FATF ICRG,” it declared.
The CFATF had urged Guyana to engage in dialogue with other CAFTF members who have undergone or are currently in the FATF ICRG process such as Trinidad who are willing to share their experiences having been subject to both prima facie and targeted review by the FATF ICRG.
The letter said that Guyana’s report to the CFAFT plenary should have been submitted to the Secretariat by May 6. It is not clear if this was done.
The official opening ceremony for the meeting will be today, when Nicaragua’s president, Daniel Ortega will address the gathering at the Holiday Inn, Pista Juan Pablo II, in Managua.
Delegates from the 29 Member Countries of the Caribbean Basin Region FATF along with representatives from Canada, France, Mexico, Netherlands, Spain, United Kingdom and the United States of America who comprise the CFATF Group of Cooperating and Supporting Nations (COSUNs) and CFATF Observers such as the Central American Bank for Economic Integration (CABEI), European Union, Financial Action Task Force, World Bank, Organization of American States, United Nations Office of Drugs are present.
In addition, the CFATF Working Group on FATF Issues (CFATF WGFI) in keeping with its remit to follow and keep the membership abreast of ongoing FATF initiatives and importantly, in preparation for the Fourth Round off Assessments of CFATF Members which should commence in the second half of 2014, will present an overview of the revised FATF February 2013 AML/CFT Methodology, the assessment tool for undertaking the Fourth Round.
