-in wake of US sanctions
Government yesterday signalled that it would be implementing stricter regulatory mechanisms to prevent gold smuggling that would include higher fines and forfeiture of assets, in the face of United States sanctions against one of the country’s largest gold dealers, and a government official.
“So we may want to take what we do at Customs now and introduce it here for the evasion of gold, not just pay the forgone [earnings] but you also have to pay a huge penalty which is in multiples of the evading taxes. So, if you get caught there is a big risk, first of all you get charged under an Act that has severe penalties…” Vice President Bharrat Jagdeo yesterday warned at a press conference at the Office of the President.
“Secondly, there is a big financial risk because you’ll have massive fines. And thirdly, we may have to start exploring what we did under the laws dealing with money laundering or drug trafficking – forfeiture of assets,” he added.
For many years, PPP/C governments have been accused of turning a blind eye to gold smuggling. This was also thought to be a problem during the 12 years that Jagdeo was President.
The United States Department of the Treasury on Tuesday imposed sanctions on businessmen Nazar Mohamed and son, Azruddin Mohamed, over the alleged massive smuggling of gold, and on Permanent Secretary in the Ministry of Labour, Mae Toussaint Jr Thomas-Meerabux, who was cited for alleged corruption, leading to her being immediately sent on leave by the government here.
Allegations against the Mohameds include defrauding the government here of some US$50 million in taxes from smuggled gold, as well as bribing public officials.
Yesterday, the Stabroek News reported that government had been mum on the issue that some 10,000 kilogrammes of gold was smuggled out of this country between 2019 to 2023.
Jagdeo however responded that that was not the case as government has asked the US for information so that appropriate action could be taken against perpetrators here. He disclosed that Senior Minister in the Office of the President with responsibility for Finance and Public Service, Dr Ashni Singh, and the Commissioner General of the Guyana Revenue Authority, Godfrey Statia, have respectively written to the US Secretary to the Treasury and the US. Internal Revenue Service (IRS).
Statutes of limitations
Because this country has certain statutes of limitations on tax evasion, the GRA has asked for the information to be provided by December 31, 2024. Government has also asked the Bank of Guyana and the Financial Intelligence Unit to prepare reports on the implications of the sanctions to the financial sector.
The Vice-President noted that while there is a view that government “is silent on this matter… a government can’t be like a social media. It has to serious, be deliberate, and it has to work in a framework, [and] particularly in this case the actions on the identified individuals will depend on the evidence we receive from the United States of America.”
He said that in strengthening the local system, government might have to turn to foreign countries to help as not only do they have more rigid regulatory regimes, this country’s gold is exported to many of them and they have data on those transactions.
“Clearly we have to strengthen the system. How do we deter smuggled gold now? Smuggled gold don’t come through any system because they tried to avoid the taxes which is the royalty payment and the five per cent final tax. It could also be used for money laundering purposes. So we’d have to get help from the receiving countries, but we’d also have to strengthen the system of penalties…” he said. He explained that the penalties won’t be on citizens wearing jewellery for adornment.
The Guyana Geology and Mines Commission (GGMC) also yesterday sounded a warning to miners and the public on their legal requirements and obligations regarding the sale of gold.
“As stipulated under Sections 6 & 8 of the Guyana Gold Board Act, persons who possess gold as a producer (miner) or a Tributor, are required to SELL ALL gold to the Guyana Gold Board, or an authorized buyer. An authorized buyer may be one of six licensed Gold Dealers currently licenced by the Guyana Gold Board, or persons/entities who are Licenced Traders in gold as authorized by the GGMC,” the autonomous gold mining oversight body said.
“For clarity, miners, operators and Tributors are reminded of the following: Miners, Operators and Tributors are required to sell their gold to: The Guyana Gold Board (GGB), which has offices in Georgetown, Port Kaituma, Bartica, and conducts periodic mobile transactions in other Mining District; to Gold Dealers of which there are six (6) such registered and licensed entities; to Licenced Traders in gold who are authorized by GGMC by way of a Traders Licence issued in 2024 and valid until the 31st December, 2024,” it added
The GGMC said that the relevant law enforcement and regulatory agencies are continuing with decisive actions to ensure that all gold mined is sold to licensed dealers, traders, or the Guyana Gold Board.
“Persons in breach of this legal requirement will be subject to criminal prosecution. More importantly, miners with existing property tenures within GGMC who are complicit with these illegal activities, will risk losing their tenures, and/or be restricted from the mining sector. Miners are urged to abide and operate within the confines of the legal requirements for the sale of gold, and remain vigilant in ensuring that all gold transactions are conducted through official channels,” the GGMC said.
