Introduction
This is my final column for 2013 and also the last in the series on the risks of money-laundering, terrorist financing, and proliferation. In the course of this series, several readers have indicated to me that there will always be money launderers and tax evaders, even from among those who shout and scream against them, so why bother! A simple analogy might perhaps help to show why we do need to bother. Consider that there will always be accidents and people will always die; 
this does not mean we should have neither traffic police/regulations nor doctors/hospitals. The realistic goal is to contain the damaging impacts of accidents, sickness and death, not to totally eradicate them, as this is impossible; by so doing we improve the quality of life for all.
Today’s concluding column will address two considerations. The first is, the Ministry of Finance’s response to Guyana having missed the drop-dead date of November 18, 2013; and secondly, brief observations on the operations of the Financial Intelligence Unit.
Ministry of Finance
As would be expected the Ministry of Finance’s statements after the passing of the drop-dead date have been more directed at the economic ramifications/implications of CFATF’s decision, than those made by the Attorney-General’s office, which has emphasized the political/legal aspects. Nonetheless, the Finance Ministry has endorsed the Attorney General’s expression of “Grave concern at the decision by CFATF to encourage its member countries to consider implementing counter measures to protect their financial system from ongoing risks of money laundering, terrorist financing and proliferation emanating from Guyana” (my emphasis).
Alongside this supportive statement, the Ministry of Finance has identified several likely adverse economic effects. First, CFATF’s decision would negatively impact Guyana’s “international marketability.” Presumably, the concern is that close surveillance of the economy would deter foreign investors and tourism. Second, close surveillance would raise transactions costs for all individuals and businesses operating in Guyana. These increases would flow from delays, interruptions, increased charges and processing fees. Thirdly, it would negatively impact remittances and money transfers.
Remarkably, while offering no comment on the impact of this development on legal migrants the ministry’s statement refers to the adverse impact on illegal undocumented residents who would be unable to provide proof of name and identity before conducting business with Guyana from overseas!
Fourth, the ministry states that ties between foreign and local banks would be “severed,” going further to claim that online, credit, and debit card transactions involving Guyana would be interrupted. All these effects would add to the overall costs of “doing business” in Guyana and thus drive up the prices of all imported goods (fuel, food, medicines and so on) and services (insurance and travel), as well as discourage exportation.
Readers should recall two earlier observations which I made. First, with or without CFATF’s decision, increased surveillance of Guyana’s financial transactions has become an absolute inevitability. CFATF is seeking to do via the Action Plan what is necessary to enable Guyana’s anti-money laundering regime. Secondly as I indicated, under FATCA, a far more stringent US-led regime to contain tax evasion (and by implication money laundering) in Guyana and the wider Caribbean will be in effect from July 1, 2014, no matter what the Government of Guyana says or does.
Financial Intelligence
Unit (FIU)
At the centre of the public dialogue on these matters is the FIU. Until recently very little has been heard about it, reflecting I believe the level of official commitment to countering the risks of money laundering and terrorist financing. Most Guyana analysts have derided the FIU as an ineffective “toothless poodle.” Even if this harsh judgment were true, I do not blame the FIU, either solely or principally, for this outcome. First and foremost, because the FIU is embedded in a state structure that has little, if any appetite, for disrupting criminal endeavours led by an entrenched cabal of political leaders, captains of business, and organized criminal groups.
Under the pressure of recent public debates, a little more information on the operations of the FIU has been forthcoming, and it would be useful to wrap up this series by briefly indicating some of this.
The FIU proudly describes itself as an “autonomous body,” established and operating “within the ambit of Anti-Money Laundering and Countering the Financing of Terrorism Act (AMLCFTA) 2009 and its Regulations.” It has the broad mandate “to facilitate the detection, prevention and deterrence” of financial crimes under the 2009 Act. Its broad mission is “to help protect the integrity of Guyana’s financial system.” Despite this broad responsibility, the FIU is heavily under-capacitated, in terms of its financial, technical, human, and other resources. Thus at the end of 2012 it reported it had six staff, with only two financial analysts/investigators attached to it!
Under the 2009 Act reporting “entities/international” travellers are required to report monthly on transactions above certain levels: for licensed financial institutions (LFIs) above US$10,000; for cambios purchases above US$2000 or sales over US$5000; for money transfer agencies (MTAs) above US$1,000, and for foreign travellers above US$10,000. For 2012 the number of reported cases respectively, was 8,807; 2,976; 29,849, and 1,003. These were comparable to the number reported for 2011.
The number of reported suspicious transactions to the FIU for 2012 was: LFIs, 7; cambios, zero; MTAs, 795; and foreign travellers 3. These figures are modestly down on those reported for 2011. A suspicious transaction is defined by the FIU as one that causes a feeling of apprehension or mistrust based on its size and/or pattern.
Conclusion
At the end of this series of columns, the original options as posed by the Leader of the Opposition remain valid. Government and the National Assembly can either embark on producing appropriate/effective legislation to deal with financial crimes in Guyana or they can settle for version 2 of the present anaemic ineffective 2009 legislation.
Happy New Year to readers all!
