Conclusion
This week’s column indicates the remaining markers that go along with the strategic guideposts provided earlier for a way forward in dealing with Guyana’s situation in regard to money laundering, the financing of terrorism and proliferation.
Regulators and regulated: Markers 5 & 6
There are two major markers under this heading. First, legislative and other proposed reforms should give priority to the requirement
of avoiding, at all costs, a progressively widening gap between the rules (as defined in the legislation and its regulations) and the enforcement of those rules (by the various competent authorities). It would be foolhardy, however, to seek to prevent such a gap from occurring by taking action which in effect dilutes one of these (say the rules) in order to match the other (that is the competent authorities’ capacity/ability to enforce the rules). Based on worldwide experiences of modern public policy management it would be safe to prescribe here that the credibility of rule-making and policy-framing bodies is essential to the successful pursuit of policy change and reform.
Second, worldwide experience further reveals that there is always one potentially fatal threat facing all regulatory regimes. That is, regulatory capture of the regime by those it is established to regulate. With the large amount of estimated sums laundered in Guyana, this is indeed a very real risk, which the reform recommendations should consider.
The flip side to the coin of regulatory capture is the real danger that the legally defined regulatory bodies are unable to display functional autonomy and independent action. Many factors can affect this outcome, not least of which is the professionalism of those who are called upon to head those bodies. These appointments therefore, should not be made by the party in government alone or its ministers; they should be subject to the approval of the National Assembly.
Socio-cultural political dynamics: Markers 7 & 8
Again there are two principal markers under this heading. Legislation of the scope before the select committee can only succeed if it emerges out of a process founded on trust and consultation with the key stakeholders. Given the size, scope and multi-dimensional nature of money laundering in Guyana, this will never be successfully implemented, if there is political and social discord over the law. It is therefore recommended that the committee deliberately seek wider involvement other than simply inviting the submission of memoranda from the public over a limited time-frame. Even someone like me who has academic familiarity with the subject could not get this memorandum out by the committee’s publicly announced due date (July). My firm expectation, however, has been that the committee could not properly do its job within that publicly announced time-frame.
The second marker is much more sensitive. That is, how to treat with those who are described in the Act as “politically exposed persons.” As noted earlier public bodies in Guyana are subject to intense outside political leadership. In such an environment political persons are able to deter regulators and are, therefore, allowed to act with considerable impunity. The main recommendation I have here is to let peer pressure work by devising a mechanism for naming (and in so doing shaming) those politically exposed persons who are suspected of infringements and irregularities. Those names should be forwarded to the Integrity Commission or similar type body.
Reporting requirements: Markers 9-11
The next set of three markers all relate to the reporting requirements of the bodies listed under the Act. Three of those requirements are of principal concern. The first marker is clearly to whom the various competent authorities should report. While this would have to be defined in terms of the specific bodies, the principle that should rule is to require reporting to be finally done to the National Assembly. If all members of the National Assembly are given these various reports that should help ensure adequate circulation to the general public.
The second marker in this subset is that reporting should be mandatory and automatic for all bodies obligated to do this. The law should use the verb ‘shall’ and not ‘may’ (as it frequently does in this regard) under Act 13, 2009, where reporting is required.
Thirdly, to underscore the mandatory requirements for reporting, the legislation should affix appropriate penalties for all those defaulting bodies and personnel, as determined under the law.
Marker 12: Other governance changes
The final marker is the status of the reform process in closely related rule of law areas of operation in Guyana; in particular improvements in the areas of procurement, financial accountability for state assets, information access, the work of bodies concerned with the oversight of integrity, the Ombudsman, and so on. Already there is on record one party of the National Assembly publicly declaring it will not support the legislative amendments before the Special Select Committee unless the Procurement Commission is established. This shows the linkage between money laundering (and related concerns) to corruption, misgovernance and crime in the wider society.
The Schedule below summarizes the key markers
Schedule: Key Markers
Number Markers
1 Earmarking Seized Assets for Frontline Bodies
2 Earmarking for the General Public
3 Technology Gap
4 Compliance v Non-compliance Costs
5&6 Regulators and the Regulated
7&8 Socio-Cultural-Political-Dynamic
9-11 Reporting Requirements
12 Related Governance Changes
Source: Author’s construction
Conclusion
This concludes for the time being, the series of columns on the money laundering situation in Guyana. The series has covered five broad topics, namely, the background and context; the origins of money laundering as a global concern; the global and regional framework for its regulation; the threats it poses to the modern state; and, finally over the past five weeks a strategic road map for the way forward. The material presented in these columns has been drawn from the memorandum which I have submitted to the Special Select Committee on money laundering, of the National Assembly.
