In a message for the World Day of Prayer for Care of Creation, Pope Francis stated that the world must rapidly ditch fossil fuels and end the “senseless war against creation”. He asserted that the planet is beginning to look more like an “immense pile of filth”. The Pope called on those responsible to repent for their “ecological sins”. Referring to commitments given under the Paris Agreement on Climate Change, he considered it ‘absurd to permit the continued exploration and expansion of fossil fuel infrastructure’. The Pope further stated that ‘the unrestrained burning of fossil fuels and the destruction of forests are pushing temperatures higher and leading to massive droughts and that ‘consumerist greed, fuelled by selfish hearts, is disrupting the planet’s water cycle’. See https://www.yahoo.com/news/ enough-fossil-fuels-pope-says-101627976.html.
The Integrity Commission recently disclosed that for the year 2022, only 663 public officials out of 1491, or 44.5 percent, have submitted their financial declarations. This is despite the grant of an extension from August 2022 to December 2022 for those officials to file ‘full, true and complete’ particulars of income, assets and liabilities, including those of their spouses and children. The Commission is required to examine the declarations and make enquiries as it considers necessary to verify the completeness and accuracy of the information contained therein. It is not clear whether this is being done and whether the list of 1491 persons includes officials involved in public procurement. By Section 21(3)of the Procurement Act, ‘[e]mployees of any procurement entity who by their job description are responsible for procurement shall declare their assets to the Integrity Com-mission’. The Commission has indicated that the next step is the publication of the names of the defaulters, with the final step being prosecution.
The Public Procurement Commission (PPC) is under pressure to investigate complaints from a Member of Parliament (MP) in relation to the award of certain contracts. Last week, the Commission responded by stating that the matters were still under “active consideration” and that it was awaiting legal external advice on how to proceed. It is understood that Commission was unhappy with internal legal advice given, especially as regards the investigation of complaints. By Article 212AA (1) of the Constitution, one of the functions of the Commission is ‘to investigate complaints from suppliers, contractors and public entities and propose remedial action’. It is also required to investigate cases or irregularities and mismanagement. The issue appears to be whether an MP, or a person or organization for that matter, other than those mentioned in the above-mentioned article, can file a complaint with the Commission. The concerned MP was, however, quick to point out that he, in his capacity as a then Minister, was the subject of an investigation by the Commission based on a complaint by another MP. That apart, it seems reasonable to consider that any investigation by the PPC of irregularities and mismanagement would be based on complaints from not only persons or organisations mentioned in the said article but also any member of the public who has knowledge of such irregularities and mismanagement.
In today’s article, we conclude our discussion of the key provisions of the draft legislation for the eighth amendment to Guyana’s Anti-Money Laundering and Countering of Financing of Terrorism (AML/CFT) Act of 2009.
Designation of entity suspected of being involved in financing of terrorism
Section (2)(1)B is being inserted to the Principal Act to provide clarity with regard to the Minister responsible for Finance making a prompt determination under the United Nations Security Council Resolution 1373 with regard to the designation of any entity suspected of being involved in the financing of terrorism, as a specified entity. This amendment removes the involvement of the Attorney General in making the recommendation whose responsibility will be that of the Director of the FIU. This proposed amendment is worthy of merit for obvious reasons, and one wonders why the involvement of the Attorney General was inserted in the original legislation.
Customer due diligence
Section 15 is being amended to provide for a situation where if a reporting entity believes due diligence is likely to tip off a customer, it is not required to carry out such due diligence. However, the necessary disclosure is to be made to the Financial Intelligence Unit (FIU). While there is also merit in this proposed amendment, one recalls that the Authorities had failed to take appropriate action in relation to almost 50 out of 100 Suspicious Transactions Reports filed by the FIU.
Cross-border electronic transfer of funds
Section 20 is being amended to provide, among others, for situations where several individual cross-border electronic funds transfer from a single originator are bundled in a batch file for transmission to beneficiaries. The batch file must contain all the required originator information as well as the full beneficiary information that is fully traceable within the beneficiary country. Financial institutions are also required to include the originator’s account number or any unique transaction reference number. They are also prohibited from executing an electronic funds transfer if it is not in receipt of the required originator and beneficiary information. One recalls that charges were instituted against three members of a family alleged to have been involved in money laundering activities involving a substantial number of wire transfers totalling some G$4.1 billion to 22 companies in China.
Power to require information by supervisory authorities of financial institutions
Section 22 A(1) is being inserted to require, upon written request, the sharing of information in the possession of supervisory authorities of financial institutions in Guyana, with the supervisory authorities of other jurisdictions. However, such information is only to be provided for the purpose of conducting investigations.
Section 23 is being amended to provide for the revocation of certificate of incorporation or business name if a person commits repeated violations of the Act, or the terms of any licence, registration, permit or other authorisation issued by the supervisory authority. This is to be based on a recommendation by the supervisory authority to the Commercial Registry in writing setting out the reasons for doing so. The Registrar of the Commercial Registry has up to seven days to effect the revocation.
Forfeiture of currency
Section 37 of the Principal Act is being amended to provide for the forfeiture of currency by the Magistrate’s Court if it is satisfied that the currency is obtained or derived from unlawful conduct, or is intended by any person for use in unlawful conduct. Where currency is forfeited, it is to be detained until any proceedings are concluded. The decision to forfeit currency is appealable to the Court.
National Forfeiture Fund
Section 66 of the Principal Act is to be amended to require the Minister to establish a National Forfeiture Fund into which all forfeited currency is deposited. This includes:
(a) All money recovered under a criminal forfeiture
order or confiscation order or under a forfeiture
order;
(b) All cash forfeited under Section 37 or under
section 6 of the Foreign Exchange
(Miscellaneous Provisions) Act;
(c) All money paid to the Government by a foreign
jurisdiction in respect of confiscated or
forfeited assets;
(d) Money forfeited or delivered as result of a
confiscation or forfeiture order under any other
law of Guyana; and
(e) Such other monies as may be specified in the
Anti-Money Laundering/Countering the
Financing of Terrorism Regulations.
Based on the recommendation of a Committee, payments out of the Fund to meet certain expenses such as the cost of operations of the Committee; to satisfy any obligation of the Government to a foreign Government or with respect to confiscated proceeds; expenses of a receiver appointed under the Act; costs of special investigations into the misuse of the financial system for money laundering, terrorist financing, proliferation financing or other financial crime; and costs or compensation awarded under the Act. From the amount remaining in the Forfeiture Fund after the satisfaction of the payments prescribed above, the Minister shall order such amount to be allocated to the Consolidated Fund at intervals to be determined by the Minister.
Proliferation financing
Section 75 is being amended to deal with proliferation financing. Proliferation financing takes place when a person acts recklessly or makes available an asset, provides a financial service, or conducts a financial transaction, knowingly that the asset, financial service or financial transaction, or part thereof is intended to facilitate any of the activities specified in Section 75 (2), regardless of whether the specified activity occurs or is being attempted. Penalty for this breach is a fine of no less than G$100 million or no more than G$500 million, or imprisonment for life or to both.
Financial reporting and audit
The Forfeiture Fund is to be administered by the Committee which is required to maintain an account with a bank authorised by the Attorney General. It is unclear why the authority to do so should be vested in the Attorney General and not the Minister of Finance. Under the Fiscal Management and Accountability Act, it is the latter who is responsible for authorizing the opening of bank accounts.
Within two months after the end of each financial year, the Committee is required to prepare financial statements containing: (i) a statement of the assets of the Forfeiture Fund at the end of the financial year; (ii) a statement of the money received and the payments made during the financial year; and (iii) such other financial statements for the financial year as may be specified by the Minister. Proper and adequate explanatory notes to the financial statements are to be included.
The financial statements are to be audited and certified by an auditor, to be appointed annually by the Minister, after consultation with the Committee. The auditor may be the Auditor General or such other suitably qualified person. This amendment contradicts Article 224 of the Constitution which vests with the Auditor General the responsibility of auditing of the public accounts, the public accounts being defined as all central and local government bodies and entities, all entities in which controlling interest, and all foreign-financed projects whether by way of loans or grants. We hope that the appropriate corrections will be made, considering the struggles we have made over the years to ensure that mandate of the Auditor General is clearly and unambiguously defined. It is inconsistent to have a State institution, and the State Audit Institution (SAI) is not involved in the auditing arrangement for that institution.
Conclusion
As mentioned above, this will be the eighth set of amendments to the AML/CFT Act. The amendments over the years did not appear to be voluntary acts on our part. Rather, there were on based on concerns expressed by international organizations, such as the Financial Action Task Force (FATF) and its Caribbean branch, CFATF. Be that as it may, we are getting closer to have legislation on money laundering and terrorist financing that is consistent with international standards.
One final point. Should we not repeal the 2009 legislation and replace it with a consolidated version reflecting the original legislation and all the amendments over the years?