Two Thursdays ago, President Donald Ramotar held a national stakeholders’ meeting to discuss the stalemate in the passing of amendments to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act 2009. The Opposition political parties declined to participate in the discussion no doubt in the belief that the appropriate forum is the Select Committee of the National Assembly where the matter is being deliberated on.
The speakers at the forum were the President himself, the Attorney General and the Minister of Finance. There was a questions and answer session after which those in attendance reportedly signed a petition urging the Assembly to approve the amendments that the Government was proposing. Previous to this meeting, the Government held fan out exercises countrywide to convince citizens of merit of its case vis-à-vis that of the combined Opposition.
The Government wants to amend the AML/CFT Act only to the extent of the deficiencies that the Caribbean Financial Action Task Force (CFATF) had identified. The Opposition is, however, insisting on a comprehensive overhaul of the legislation, given the special circumstance with which Guyana is faced as regards drug trafficking and hence money laundering as well as allegations of corruption. In addition, the Opposition is demanding that the President assents to the Bills that the Assembly had approved, and in the case of the Alliance for Change, the establishment of the Procurement Commission. Both sides are sticking to their positions, and it is unclear whether a compromise can be agreed on.
No one can dispute the merits of having stakeholder consultations on an issue such as money laundering and terrorist financing in view of Guyana being declared a transit country for cocaine destined for North America, Europe and West Africa. However, one would have thought that such consultations would have taken place prior to the drafting of the amendments so that the views of the various stakeholders would have been taken into account in arriving at the draft. Regrettably, this did not happen.
The President’s contribution
The President reiterated the Government’s commitment to the passage of the amendments to address the deficiencies that the CFATF had identified. He reportedly stated that the Opposition was employing delaying tactics since the related Bill was introduced in the Assembly in May 2013 and that several deadlines were missed. While acknowledging that there was some delay on the part of the Government because of the priorities on the 28 November 2011 elections, the President did not mention the fact that it took 16 months after those elections to table the amendments. This was despite several warnings from CFATF of the precarious position with which Guyana was faced. It was only when the country was threatened with sanctions that the Government decided to act. It drafted the amendments without any input from the Opposition and wanted their urgent passage in the Assembly.
The President rejected a suggestion that all political parties should accept responsibility for the stalemate because of a lack of compromise. He stated that he could not yield to any demand that would trample on the powers of the Executive or to any proposed action that is unconstitutional.
As regards the Procurement Commission, the President insisted that Cabinet maintains the right to offer “no objection” to the award of large contracts since it is the function of the Executive to do so. The Constitution was amended in 2001 to provide for the establishment of the Commission to ensure that the procurement of goods, services and the execution of works are conducted in a fair, equitable, transparent, competitive and cost effective manner. This amendment was mainly in response to persistent criticisms by the Auditor General over the years of the existing arrangements as well as public pressure to reform the government’s tendering procedures. In particular, many stakeholders held the view that the arrangements in place did not provide them with confidence as to the fairness and transparency in the award of government contracts, and there was no mechanism in place to address their concerns.
The President did not explain why the Government had supported the constitutional amendment 13 years ago that removed Cabinet’s involvement in the procurement process and vesting it with the Commission at a time when it also held the majority in the National Assembly. Nor did he explain why the Government had not taken steps to operationalise the Commission during this period. The President contended that Cabinet had the power to award contracts and that it voluntarily gave up that power in exchange for the no objection arrangement. However, the no objection clause is specifically stated in the Procurement Act of 2003 which also provides for the cessation of the role of Cabinet or a progressive phasing out of that role upon the establishment of the Commission.
Prior to 2004, Cabinet would approve of an award, and it was the concerned Ministry or Department that entered into the contractual arrangements. The current practice is for Cabinet to offer its no objection to contracts of $15 million and over based on a recommendation of the National Procurement and Tender Administration Board (NPTAB). Few will deny that for all practical purposes this constitutes approval.
In addition, it is not publicly known if Cabinet has ever rejected an award. If this were to happen, the Minister’s work will be called into question since it is the Minister who appoints the members of the NPTAB. The Chairman of the Board also reports to the Minister, a key member of Cabinet. In such a setting, it is inconceivable that the NPTAB would recommend an award that does not find favour with Cabinet. Further, the reporting relationship of the NPTAB to the Minister who is a key member of Cabinet offering no objection to the award of a contract creates a situation of conflict of interest.
In relation to the Bills that he had not assented to, the President maintained that they were unconstitutional. However, various authorities on constitutional matters have argued that it is for the Courts to decide on the constitutionality of a matter, as was the case in relation to the budget cuts. It was after the President had signed the 2012 Appropriation Bill that the Courts were asked to intervene.
The President also rejected the suggestion of the Private Sector Commission that the Barbados model be adopted for Guyana, contending that the CFATF was having problems with that model. The model provides for the creation of an anti-money laundering authority, chaired by a representative of the University of the West Indies with the deputy coming from the private sector. The other members are the Solicitor General, the Head of Customs, the Supervisor of Insurance, Registrar of Companies, the Central Bank of Barbados and two members of the private sector who are specialised in banking and finance. The Government has since presented a modified version of the Barbados model to the Select Committee but the debate continues as to whether or not the Assembly should have the say in the appointment of the staff of the FIU.
The Government has argued against the Assembly’s involvement, contending that a conflict of interest would arise as Members of Parliament are “politically exposed persons”. One commentator, however, suggested that the Assembly’s involvement has greater merit since the officials who are expected to be members of the Authority would lack the desired level of independence from the Executive, having been appointed by the latter. Reference was also made to what appears to be excessive powers in the hands of the Minister of Finance and the Attorney General regarding seizures as well as the appointment of staff of the FIU, and whether they are not also politically exposed persons.
Other contributions
In response to a comment about the absence of any prosecution in relation to money laundering offences, the Attorney General contended this is also true for the rest of the Caribbean. However, since 2008 Bermuda has had at least 15 successful prosecutions and there were significant amounts seizures of cash and confiscation of properties. The Cayman Islands, Jamaica, and St. Vincent and the Grenadines have also had several successful prosecutions and seizures over the last four years or so.
The Minister of Finance contended that the Government alone is not responsible for the appointment of the five members of the Procurement Commission. Rather, it is the Public Accounts Committee (PAC) that has to make the nominations to be ratified two-thirds majority of voting members of the Assembly. He, however, failed to mention that the PAC comprises members from both the Government and Opposition sides, and while the Opposition nominated their candidates, the Government is yet to do so.
Next week, we will look of the role of Jamaica’s Contractor General to ascertain to what extent that model can be applied to Guyana.
