Unmistakable
The draft Anti-Money Laundering Bill has replaced the Bill on Amaila Falls as the talk of the town. In the run up to the vote on raising the debt ceiling to allow the administration to increase its borrowing, Amaila Falls was on the lips of many Guyanese. The conversation about Amaila has dried up and Guyanese have turned to a new flow of news to satisfy their appetite for interesting stories. In place of the dried up Amaila has come discourse about anti-money laundering and 
financing of terrorism. The issue has risen to the top of the conversation list in recent weeks as a result of some sections of the business community calling on parliament to complete work on amending the Anti-Money Laundering Law of 2009.
Since the Bill was presented by the administration and the opposition asked for time to study it, the pleas of the concerned seem specifically directed at members of the opposition. The purpose of their appeal for the passage of the amendments is unmistakable. Some parts of the business community are concerned about the emerging impact of Guyana’s non-compliance with international legislation on their profits. The businesses are worried about the cost of doing business and hence the impact that this will have on their bottom line.
The timing and selective nature of the appeals might be having unintended consequences. The view has emerged that some businesses are not too concerned about the overall national interest, but merely about guaranteeing the returns on their investments. To some, these businesses have no interest in the overall welfare of their customers based on the disinterest which they have shown for the establishment of the Public Procurement Commission (PPC) and the reconstitution of the Integrity Commission (IC).
Anxiety
Some context and background are appropriate to this point-of-view. The anxiety of the business community reflects the implications of the openness of the Guyana economy and its dependence on foreign trade. That dependence is a function of the history, structure and size of the Guyana economy while the openness is a condition for being a part of the global trading system. On account of its history, the country was built to serve overseas markets, initially in Europe and then elsewhere. History and later ambitions of economic independence then helped to shape the economic structure of the country.
Ultimately, it is the size of domestic demand that has sustained the need for openness of the Guyana economy. By way of example, exports represented about 56 percent of GDP in 2012. That means more than half of the income earned last year came from overseas. For some products such as sugar, rice and bauxite, which contribute a substantial share of income, the percentage is even higher. Guyana exported an average of 80 to 90 percent of the output of such products last year. That is because local demand for those products is very small or non-existent as is the case with several other products produced in the country. Further, Guyana is unable to produce many of the products that it consumes, thus necessitating the retention of an open economy.
Legitimacy of the Trade
As such, keeping the passage clear for trade and other international transactions is important for Guyana. In addition to respecting the trading rules, there is greater need now to protect the legitimacy of the trade. Studies show also that there is a growing convergence of anti-money laundering requirements and industry-leading practices across the world. Guyana needs therefore to get with the programme of addressing money laundering and the risk of terrorism financing in order for trade and its financing to continue uninterrupted. Matters of money laundering and financing of terrorism are not activities that take place in a vacuum. They aid in the formation of legally registered businesses. Legally registered businesses get a chance to operate in the formal economy and do business with all, including the government. Attitudes towards money laundering need to be informed by the reality that such crimes are not merely about proceeds from drug trafficking. They are also about financial fraud, illegal arms sales, violation of foreign-exchange controls, illegal gambling and crimes committed with the use of computers.
Convergence of Rules
This issue therefore contains a broad spectrum of risk which could easily be confused with similar conduct exhibited within legitimately established businesses. This administration places emphasis on public-private partnerships as a means of delivering public goods and services. Given that emphasis, the risk exists that the government could be unwittingly enabling ill-gotten money to find its way into the formal economy.
The traditional procurement process opens opportunities for that to happen as well. The convergence of anti-money laundering rules and strategies could very well see interpretations of such crimes following those of the US given that most of our international transactions are with that country. US law enforcement agencies consider several factors when determining if an institution or an individual is participating in money laundering. Among them are two that make setting up the PPC urgent. One factor is referred to as “reckless disregard” and the other is called “willful blindness”. Reckless disregard includes not paying attention to sound business practices and regulatory rules. Given that improving business practices is a possible outcome of the work of the PPC, it makes sense to have it in place as a means of aiding companies to learn about and pursue good business practices, thereby avoiding being caught unnecessarily in an act or behaviour of reckless disregard.
Willful blindness refers to the failure to follow up in the face of information that suggests an illicit activity might have occurred. It is public knowledge that the cases of NCN and NDIA are before the president. Those two cases have been with the president for over one year and they have not been finalized. Such behaviour could lead to an accusation of willful blindness.
Some businesses appear happy to live with the potential embarrassment of an entire nation just to preserve their closeness to the administration and to protect their profits. The PPC as proposed has a mechanism that would prevent the president from being caught up in such a potentially embarrassing situation. One would think that the administration would be interested in having the Public Procurement Commission (PPC) in place as an additional way of helping to protect it and the country against such accusations and risk.
Validate Good Business Practices
But the way some businesses have been behaving does not look good in the eyes of many customers. They have not insisted on the establishment of the PPC. Many informed customers are aware that the current system of public procurement was designed to promote competition among businesses who participate in the public procurement process.
The purpose of this initiative was to ensure that better quality public goods and services became available to the taxpaying public at lower prices. Competition among businesses would produce a wider national benefit in the form of improved business methods and greater performance efficiency. Members of the business community know that improved productivity leads to increased incomes, something that many workers in the private sector yearn for. A critical component of the procurement system that could help to validate good business practices and aid in increasing productivity through competition is the PPC. Additional benefits from having a functioning PPC are fairness and equity of treatment of all suppliers and contractors and the promotion of public confidence in the procurement process. Its existence and functioning are critical to Guyanese feeling satisfied with the integrity and transparency in the procedures used in awarding contracts. Private businesses have not called for the setting up of the PPC even though they are aware of the benefits of lower prices and higher wages which could accrue to customers and workers respectively from its existence.
Framework
It is not uncommon to find that countries rely on more than one mechanism to assist in the fight against money laundering and the financing of terrorism. The United States of America uses several pieces of legislation to fight these crimes. Among these are the Bank Secrecy Act, the Money Laundering Control Act and the USA Patriot Act. The United Kingdom (UK) also relies on several laws to protect the integrity of its financial system. The several laws serve to provide a framework in which to pursue the perpetrators of such crimes. They also serve as a map for businesses to navigate the minefield of risk inherent in the conduct of business. Nothing is wrong with Guyana using a combination of laws relevant to its circumstances to fight money laundering and the financing of terrorism. They can help each other. Trends observed with the use of statistical analysis in procurement transactions could be used as an input in the fight against money laundering and financing of terrorism if and when necessary. Similarly, financial analysis performed on the financial assets reported to the Integrity Commission could also serve as input into the money laundering fight. It is in this context that the appeals for establishing the PPC and reconstituting the Integrity Commission should be seen.
Hurting the Nation
Yet, some sections of the business community do not seem to realize that many of their customers see the proper functioning of these institutions as priorities and want to see them in place. Instead, they seem to embrace the delaying tactics of the administration and do not regard them as hurting the nation.
LUCAS STOCK INDEX
The Lucas Stock Index (LSI) fell slightly by 0.47 percent in trading during the final week of October 2013. Trading involved three companies in the LSI with a total of 8,673 shares in the index changing hands this week. There was one Climber and two Tumblers. The Climber was Guyana Bank for Trade and Industry (BTI which rose 1.02 percent on the sale of 3,673 shares. The Tumblers were Demerara Tobacco Company (DTC) 2.72 percent on the sale of 1,000 shares and Sterling Products Limited (SPL) which fell 10.71 percent on the sale of 4,000 shares.
