-cites absence of investigations, prosecutions
Gold smuggling is one of the highest money laundering threats in Guyana, according to the second Money Laundering (ML) and Terrorist Financing (TF) National Risk Assessment (NRA).
The assessment was compiled by the Anti-Money Laundering and Countering the Financing of Terrorism National Coordination Committee. Its work has been hailed by Attorney General Anil Nandlall.
The overall level of the ML threat in Guyana is Medium High, due to significant estimated value of the proceeds of crime generated from predicate offences that have been committed in the country, and the lack of convictions of money laundering over the years, the NRA found.
“An examination of the predicate offences for ML indicates that over the assessed period there were numerous investigations and charges however, none resulted in “parallel ML investigations” much less ML prosecutions. The true magnitude of the amount of illegal proceeds these crimes generated was mostly estimated since adequate information was unavailable,” the report stated.
The Anti-Money Laun-dering and Countering the Financing of Terrorism National Coordination Committee analyzed twenty serious offences listed as predicate in the Anti-Money Laundering and Countering the Financing of Terrorism Act and found that the ones that pose the highest threat in the country are smuggling including gold smuggling, tax evasion, illicit trafficking in narcotic drugs and psychotropic substance and fraud.
According to the report, an estimated value of the proceeds generated from those offences is approximately USD 2.2 billion, USD 19.5 million, USD 13.4 million and USD 8.4 million respectively for the period 2016 to 2020, with gold and currency smuggling listed as the highest.
“Although there were only two (2) convictions over the assessed period which resulted in the confiscation of USD 37,554, the estimated value of the proceeds related to this offence stands at USD 2.2 billion. The estimated value of proceeds for smuggling including gold smuggling was calculated by the WG [Working Group] based on media reports.
The NRA noted that in 2016 it was reported that 15,000 ounces of gold is smuggled out of Guyana weekly, while in 2017, a major gold smuggling racket was unearthed through the US Federal Bureau of Investigation (FBI) which provided Guyana’s authorities with a list of persons who had taken gold to the JFK Airport, New York, and declaring it there.
“The smuggling was made possible because Customs and other Gold Board documents were recycled along with seals. Hundreds of millions of dollars of profits were being made but little for Guyana. Considering these factors, smuggling including gold smuggling represents a High Threat of money laundering in Guyana,” the report said.
The NRA report emphasized that the findings are based on statistical evidence of investigated and prosecuted cases, and on the value of proceeds confiscated, as well as estimated to have been generated from the crimes, while estimates are based mainly on media reports, and suspicious transaction reports filed with the Financial Intelligence Unit (FIU).
High vulnerability
The report also found that the only sector with the highest money laundering vulnerability is Dealers in Precious Metals/Licensed Traders. “This high vulnerability is due to the large number of unregulated licensed traders who are not in compliance with the AML/CFT provisions,” the report stated.
Amid concerns that Venezuelan gold was filtering into the local market in 2019 and the Guyana dollar was depreciating substantially, the state’s Financial Intelligence Unit (FIU) had recommended that a high level team be established to do a comprehensive review of the trading of the precious metal.
The FIU report in the second half of 2019 had also urged that action be taken against illegal cambios.
Nothing came of these recommendations and it is unclear if they will now be pursued.
In the second half of 2019 the FIU set about to determine whether there was information to support the assumptions that USD traded through the illegal roadside cambios and even legitimate cambios were being used to support illegal gold trade between Guyana and Venezuela during the period January 2018 – July 2019.
Trafficking in narcotic drugs
Aside from gold smuggling, tax evasion, illicit trafficking in narcotic drugs and psychotropic substance and fraud are also high money laundering threats in Guyana, the risk assessment report said.
The NRA said, over the assessed period, the Guyana Revenue Authority (GRA) confiscated approximately US$56,074 for failure to declare and dealing with goods to defraud revenue and duties. It was estimated that the value of the proceeds from this offence is over US$19 million.
As it relates to illicit trafficking in narcotic drugs and psychotropic substance the estimated value of the proceeds generated from narcotic offences for the period 2016 to 2020 is approximately US$13.4 million.
“Although, the authorities investigated and prosecuted over 2,000 cases, there were only 586 convictions over the period and the authorities were only able to confiscate USD 282,138 which includes currency and other movable property,” the NRA said. It also pointed out that the International Narcotics Control Strategy Report (INCSR) published by the United States’ Bureau of International Narcotics and Law Enforcement Affairs in March 2020 states that Guyana is a transit country for cocaine destined for the United States, Canada, the Caribbean, Europe, and West Africa.
During the same period, 1,139 instances of fraud, resulting in 1,152 prosecutions and 302 convictions were investigated. The FIU made 7 disseminations to SOCU relating to suspected fraud occurring in Guyana, but there were no reported seizures or restraint of property in relation to this offence, the report said. The estimated value of this crime is said to be USD 8.4 million.
Finally, the threat of money laundering from predicate offences that could not be identified (unspecified predicate offences) was also determined to be high, given the value of the suspected money laundering cases which fit this profile. The estimated value of the proceeds generated from the unknown predicates is over US$29 million.
Corruption is one of the predicate offences that was investigated but the report found that very few investigations and prosecutions (five and three respectively) and no convictions over the assessed period. This it is considered a Medium High money laundering threat.
Nevertheless, the estimated value of the proceeds generated from this offence is USD 2.6 million.
“Bribery is believed to be widespread among public officials in the country, particularly those responsible for the issuance of licenses. The Working Group believes that this may be due to the low remuneration packages offered to public officials whose duty it is to ensure that the law is upheld,” the report stated.
