In the face of a risk assessment that gold smuggling is one of the highest money laundering threats in Guyana, Attorney General Anil Nandlall SC says that the government plans to take measures to crack down on the crime and to boost prosecutions.
In an interview with the Sunday Stabroek following several reports in this newspaper on the findings of the second Money Laundering (ML) and Terrorist Financing (TF) National Risk Assessment (NRA), Nandlall highlighted a number of recommendations that have been made in an action plan to address gold smuggling.
“With respect to possible gold smuggling, the action plan has recommended revisions to the Tax Act and mining laws and regulations to bring greater clarity and practicality to the licensing procedures and regulation of gold and diamond dealers. Once this is finalized, it is expected that a more effective enforcement programme will be implemented to identify and sanction persons operating without the requisite licence,” he asserted.
On the concern in the assessment report that there have been few prosecutions, Nandlall said: “Admittedly, the NRA identifies failure to institute a sufficient number of criminal charges and prosecutions as deficiency. This is recognized and a series of actions have been planned to address this deficiency. These include enhancing the investigative capacity of SOCU (Special Organised Crime Unit), and adding more lawyers to its staff. Guyana has recently signed on fully to the Regional Security System (RSS), which will partner Guyana in exchanging and investigating AML/CFT information and complaints”.
The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Coordination Committee analysed twenty serious offences listed as predicate in the Anti-Money Laundering and Countering the Financing of Terrorism Act and in its assessment report 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 substances 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.
Nandlall expressed dissatisfaction with Thursday’s article in the Stabroek News, headlined `Gold smuggling one of the highest money laundering threats here’, as he pointed to measures taken by government to not only address gold smuggling, but ramp up the overall oversight and enforcement architecture to countering financial crimes.
“Firstly, the National Risk Assessment (NRA) referred to in the article, represents the second risk assessment completed by Guyana within a span of 6 years. This, we believe, is unprecedented in these parts of the world. Many countries in and outside of the region have not completed one NRA. This exercise completed at significant cost to the Government and people of Guyana, with support from the World Bank, is in keeping with the requirements of the Financial Action Task Force (FATF),” he told this newspaper.
“It demonstrates the GOG’s commitment to complying with these standards and obligations, and to play our part in protecting Guyana and by extension, the international financial systems, from money laundering, terrorist financing and other related threats,” he added.
Expressing discontent in the reporting on the report, Nandall lamented that the article sought to “highlight only negatives from the report” and he believes it “is unfortunate”.
A few of the favourable findings of the second NRA which were not mentioned in the article, Nandlall believes that the overall money laundering threat level improved from high in the first NRA to medium high in the second report.
“Several sectors usually considered to be vulnerable to money laundering, were rated as possessing minimal money laundering vulnerability levels in Guyana. These included credit unions, securities companies, pawnbrokers, insurance businesses, betting shops, casinos, and cooperatives”, he posited.
Domestic cooperation
“Guyana has a comprehensive AML/CFT legislative framework, in compliance with the FATF Standards. The high levels of domestic cooperation and coordination that exist in Guyana, … is evidenced by the fact that several MOUs were established and are utilized among domestic competent authorities, in the fight against ML and TF,” he added.
And while not disputing that the reporting in the newspaper is drawn from the report, he said that “No attempt was made to reach out to anyone to obtain clarity and or further updates in an effort to ensure the public gets a big picture perspective of this issue.
“Additionally, some very important positives and improvements on the first NRA, were sadly not highlighted. This could have easily been used to recognize the hard work of the AML/CFT compliance professionals and other stakeholders that are working hard with support from the Government, to improve Guyana’s AML/CFT regime”, he posited.
Comprehensive Risked Based Action Plan
Nandlall said that he believes no effort was made to enquire or share information in the article about the many measures being taken by the Government and the various agencies to improve the level of effectiveness of Guyana’s AML/CFT framework. “Many of these measures are encapsulated in a comprehensive risk-based action plan that was developed by the working group that completed the NRA”.
He later shared the Action Plan, which he explained was a separate document on the FIU’s website. While the NRA was taken from FIU’s website, the action plan had not been posted at that time.
The NRA exercise, he informed, was conducted by a “committed working group” of over 70 individuals from over 40 public and private sector entities locally.
Pointing out that the article sought to highlight the concerns referenced in the report relating to smuggling, including gold smuggling, Nandall said that the concerns of illegal smuggling in general have and will continue to be the focus of this government.
“A number of factors make Guyana naturally vulnerable to smuggling. This includes but is not limited to our very expansive and exposed international borders”, he said.
He cited other initiatives to address gold smuggling and the need for more prosecutions.
He said that Guyana has also been working with several United States law enforcement agencies such as US Marshals, the Federal Bureau of Investigation, the Department of Justice, and the National Centre for State Courts (NCSC) in various crime-fighting platforms.
“Only a few months ago, training was conducted by the NCSC at the Marriott Hotel, bringing together agencies such as SOCU, CANU, Guyana Revenue Authority (GRA), Guyana Geology and Mines Commission (GGMC) , the Office of the DPP, Guyana Gold Board (GGB), Guyana Energy Agency and the Attorney General’s Chambers. The focus of this training, was civil asset recovery of assets being proceeds of crime,” he related.
“Despite the attempt of the (Stabroek News) article to be negative, the Government is positive and optimistic that measures have and will continue to be put in place to address all threats and vulnerabilities identified in the NRA Report. The Government has always and will continue to ensure all obligations are met with respect to developing an effective AML/CFT regime in Guyana,” he added.
However, observers have pointed to the clear laxity in the gold sector even in the face of a recommendation by the state’s own Financial Intelligence Unit that an investigation be conducted into the trade. Several months ago a hoarder of raw gold reported a theft to the police and while the theft was investigated and charges brought against the accused, the hoarder of the gold – amounting to 1,000 ounces – has not faced a single charge despite the fact that numerous red flags would have been raised by this cache.
No stone
The Attorney General said that since the finalisation of the NRA, the government has taken several actions to reduce the country’s threat level to ML and TF.
“An updated National ML/TF Strategy has been drafted to bring the country’s entire AML/CFT regime in line with the updated FATF standards, and relevant to the current ML and TF threats existing locally. This is supported by the recent amendment to the AML/CFT Act aimed at increasing effectiveness by facilitating Guyana’s membership to the Egmont Group (an association of FIUs); continuing outreach and training to the private and public sector entities aimed at increasing ML/TF awareness; continuous guidance and supervision provided to reporting entities to ensure compliance; intensified on-site AML/CFT examinations of reporting entities. These are just a few of the ongoing measures being undertaken in response to the recommendations made by the NRA working group,” he contended.
He added: “The Government is committed to ensuring no stone is left unturned in the fight against money laundering and terrorist financing in Guyana, and that this is done in line with the FATF Standards.”
Already, he said that the NRA and its supporting risk-based action plan continue to get the support of the Government.
“Resources are made available to ensure recommendations are implemented. Some of the other recommendations that the Government in considering include: increasing the human resource capacity of key agencies responsible for combating money laundering and terrorist financing (FIU/ SOCU/ DPP); finalizing the National Strategy for combating ML/TF; reviewing and amending relevant legislation to ensure consistency; establishing sentencing guidelines to ensure uniformity in the application of the laws; establishing a AML/CFT Compliance Commission…,” he stated.
Nandlall added, “auditors and attorneys etcetera are monitored and supervised for AML/CFT compliance; consolidating the AML/CFT amendment Acts to provide a more accessible and transparent legislative framework and make the law more reader-friendly; and digitizing the records of the Commercial Registry to ensure timely access to beneficial ownership information for legal persons and or companies.”
He pointed out that the working group utilized a number of strategies in accumulating data used to determine the perceived state of affairs, with respect to the money laundering and terrorist financing risks in Guyana.
The assessment, according to the Attorney General, was based on known and suspected threats and vulnerabilities, and the corresponding existing and planning mechanisms to combat same. These included but were not limited to the use of questionnaires and direct interviews with key stakeholders, open-source data and statistics.
The findings of the ML/TF National Risk Assessments, he explained, will be used to help this country determine how to allocate resources to effectively reduce identified risks, as is commonly done by countries around the world.
The World Bank also continues to provide support to government in this area and provides the toolkit for assessing and developing action plans for more effective AML/CFT policies and practices
Among other assistance, in May of this year, it held an online workshop, intended for all government officials who wished to expand their expertise in the assessment of predicate crimes, money laundering and terrorist financing risks.
