Written Submission to the Select Committee on the AML+CFT (Amendment) Bill 2013

Guyana’s managing of anti-money laundering activities has not been encouraging. A SN editorial to mark the third anniversary of the Money Laundering (Prevention) Act 2000 since its enactment described it as a “bear in hibernation”. Yet, the list of persons who pronounced on the Act at various stages included then Finance Minister Sasenarine Kowlessar who after the act’s assent announced that no decision had been made as to who would supervise the act; then President Jagdeo, who one year after the act was passed said no funds had been budgeted for its implementation; then Director of Budget Dr. Ashni Singh who pronounced that “money-laundering could have significant influence on currencies, market prices and financial stability”; then Home Affairs Minister Gajraj who in discussing money-laundering spoke of non-working millionaires and the “Siamese twins of the narcotics scourge”; his successor Ms Gail Teixeira who called on consumers to boycott drug lords’ businesses; and Commissioner General Khurshid Sattaur who had announced that GRA’s software would pinpoint money launderers.

Not only did such high level politicians and executives address their minds to money-laundering, the Cabinet in 2001 established a special task force under Dr Roger Luncheon to oversee the implementation of the Act. The report of that special task force, even if not updated, can help to accelerate the work of the Select Committee.
Continue reading “Written Submission to the Select Committee on the AML+CFT (Amendment) Bill 2013”

Playing with money laundering and terrorism legislation

Introduction
Guyana joined the Caribbean Financial Action Task Force (CFATF) in 2002, twelve years after it was established in May 1990. The CFATF is an associate member of the Financial Action Task Force (FATF), the international body established in 1989 charged with examining countries’ money laundering techniques and trends, reviewing the actions which they had already taken, and setting out the measures that still needed to be taken to combat money laundering. Following the terrorist attacks of September 11, 2001, the FATF added terrorist financing to its mandate.

By 2002, Guyana had already passed the Money Laundering (Prevention) Act 2000 which granted to the Minister of Finance the discretion to appoint the Bank of Guyana or some fit and proper person as the Supervisory Authority for the Act. Favouring the latter course, some time in 2005 the Minister of Finance handpicked Mr Paul Geer to head a Financial Intelligence Unit located in the Ministry of Finance. Mr Geer’s experience included five years as head of the Guyana Bank of Trade and Industry, which he left abruptly – officially for personal reasons ‒ in a golden parachute and after a meeting of the bank’s Board of Directors.

Despite the allocation by the National Assembly for the FIU of more than two hundred and seventy-five million dollars since Mr Geer took up the position, the unit has had virtually no success in pursuing even the limited objectives of the 2000 Act. Not surprisingly then, Guyana’s reputation as a prosecutor of money-laundering has no gloss. Some have blamed the deficiencies of the Act but Mr Geer did not help the government’s case by his unavailability to meet the press or unwillingness to answer questions about the FIU.

Following some critical reviews of the by then limited 2000 Act and the country’s anti-money laundering efforts, the government introduced the Anti-Money Laundering and Countering the Finance of Terrorism Bill on June 4, 2007. After nearly two years and fifteen sittings of a Select Committee the National Assembly on April 30, 2009 passed the Bill. Reinforcing the perception that he was never serious about pursuing crime and its proceeds, then President Jagdeo took one hundred and seven days before he assented to the Bill on August 14, 2009. And then it took another 87 days before the publication of Order # 22 of 2009 to bring the Act into force.

The later Act was equally poorly administered prompting President Jagdeo some time in 2011 to publicly castigate the unit for its inability to meet even basic annual reporting obligations to the National Assembly. Put bluntly, the FIU of the 2009 Act and its predecessor Supervisory Authority under the 2000 Act have been disastrous failures, so much so that we probably could have done without them, without noticing their absence.

Continue reading “Playing with money laundering and terrorism legislation”

Surge

Introduction
Two very important pieces of legislation to which the Jagdeo administration had committed itself are now before Special Select Committees of the National Assembly working feverishly overtime to ensure that this legislation is passed before the Ninth Parliament comes to an end. The two are the Access to Information Bill 2011 and the Telecommunications Bill 2010. A third issue being addressed by a Select Committee is one dealing with campaign financing introduced by AFC prime ministerial candidate Sheila Holder, although it is reportedly receiving little support from the PPP/C which with the resources of the state at its disposal seems to have little interest in such esoteric matters.

In today’s column I will consider the Access to Information Bill and begin a review of the Telecommunications Bill which I believe has a number of implications even beyond the development of the telecommunications sector and by extension the rest of Guyana. When these two Bills emerge from their respective select committees they will not have had the full benefit of the parliamentary opposition because it opposed the deferment of the recess by the government, which is determined to ensure that the two bills are passed and assented to by President Jagdeo before he leaves office.

Access to information and campaign financing were two of the areas on which US President Carter might have thought he had had some kind of commitment from President Jagdeo when he left Guyana in 2003. Indeed President Carter, whose Center had spent years and millions of dollars on the now forgotten National Development Strategy, in his parting press statement on August 19, 2004 – a full seven years ago – noted that he had offered his Center’s technical and financial resources to the Government of Guyana in developing access to information and political campaign financing legislation.

Access to Information
Last Friday I appeared before the Special Select Committee on the Access to Information Bill to which I had earlier made a written submission. Based on some research on similar legislation particularly that closer to home I am convinced that our Bill serves no purpose other than to say we have access to information legislation. The whole structure of the Bill is wrong: only one of seven directors is to be appointed on the recommendation of the Leader of the Opposition; the control of information is in the hands of a single political appointee; there is no provision for an oversight mechanism; the only effective complaint mechanism is the High Court; the information czar is allowed a period of thirty days of receipt of a request merely to acknowledge it and sixty days to advise the applicant if the request is approved or denied. On top of these the Bill provides for so many exemptions that I would be surprised if it will ever be used by more than a dozen or so persons annually.

Systemic problems
As I reflected on my past experiences with select committees there are at least five problems that struck me concerning the formulation of legislation in Guyana. The first is the adversarial nature our parliamentary culture which extends to the select committees. This culture places persons and citizens in rival camps and the camp becomes more important than the contribution or the message. This would mean that if a submission comes from Clive Thomas or a Christopher Ram it must be rejected since that is considered as yielding in to the “opposition.”

The second which derives partly from the first is that a Bill is either a government Bill or an opposition Bill. If the Bill comes from the opposition, as sometimes happens, the government members of the select committee feel compelled to oppose it. If it is a government Bill, the government members likewise are compelled to support it – even if it or any part of it offends their principles or their intellect. For example there are several pieces of legislation that have passed through select committees and the National Assembly which seem to be unconstitutional. I cannot accept that an Anil Nandlall or a Raphael Trotman who are on the Access to Information Select Committee would not be aware of such instances, and possibly in respect of the Access to Information Bill they are considering. I would, under normal circumstances, expect them to say to the Chairperson: “We cannot support such or such a clause and if the weight of the majority still goes against our knowledge and principles we will produce a minority report.”

The third is the system we have adopted in preparing for legislation. In the Westminster model, governments intending to introduce important pieces of legislation would issue a Green Paper, which is a statement by the government on a particular topic setting out propositions to the nation for discussion. My information is that that used to be done here but we have thrown away the baby with the bath water and by the time a Bill is presented it is the party’s Bill and the party line must be followed. That hardly results in good policy or legislation.

The fourth problem appeared ironic in the context of the ATI Bill. One of the principles recommended by the International NGO Article 19, is that meetings of governing bodies – which should obviously include the National Assembly and its committees – must be open to the public. When I pointed this principle out on Friday, Ms Gail Teixeira, acting Chairperson of the Select Committee, with a straight face sought to inform me that the National Assembly recently voted to keep such meetings private. Perhaps the irony of her statement and the occasion escaped the country’s governance czar.

The fifth and final one is that we still have legislation that is premised on the fundamental assumption that “we” will always be in power. The PPP/C it seems has not learnt from the PNCR’s lesson that your own rod whips you hardest. The constitution that they passed when they enjoyed the fruits of power is now their biggest obstacle to preventing the excesses of their successor. The time may come when the PPP/C in opposition may need information. Then they will know how flawed, lopsided and undemocratic the present draft of the Access to Information Bill really is.

Telecommunications Bill
This Bill has as much importance to foreign investment, technology and development as the Access to Information Bill has to freedom of speech, democracy and governance. But with the opposition parties no longer taking part in any parliamentary activities the government is once again likely to push this Bill through the National Assembly. Whatever may be the government’s intention in bringing the Bill at this late stage, it must also be counting on receiving much public support; one of the Bill’s effects is the end of the monopoly which GT&T has enjoyed for twenty years under an agreement its parent company entered into with the Hoyte administration.

The Bill is a huge piece of legislation extending to ninety-five clauses. Yet perhaps the most important effect is included or addressed only by implication and that is GT&T’s monopoly over key segments of the telecommunications sector.

This monopoly goes back to 1991 when it was granted to ATN as an inducement to have them buy an 80% stake in the then Guyana Telecommunications Corporation. Monopolies are of course “utterly void” under our Civil Law Act, which is second only to the country’s constitution in terms of legal significance. (That Act saw the country breaking away from Roman-Dutch law and adopting, with a few exceptions, the civil law of England.) Yet, the matter is not so simple and GT&T will naturally seek to protect what they consider their rights.

The Explanatory Memorandum to the Bill states that it “provides for an open, liberalised and competitive telecommunication sector that will be attractive to new market entrants and investors, while preserving the activities of the current sector participants.” I doubt whether GT&T is likely to share that view not only because it impliedly loses its monopoly, but also because it gives favoured treatment to some of the President’s friends..

The Explanatory Memorandum goes on to state that it seeks to “creat[e] a competitive environment for telecommunications [which] is expected to result in greater choice, better quality of service and lower prices for consumers. To further national and regional social and economic development, the Bill also specifically addresses the expansion of telecommunications networks and services into unserved and underserved areas through the institution of a new universal access/universal services programme.”

It also states that along with consequential amendments to the Public Utilities Commission Act 1999 which has also been introduced in the National Assembly and regulations expected to be published once the Bill is assented to, the country will have a clear, harmonized framework and a level playing field for the sector that is lacking in the current laws.” It expects that these would bring us in line with “other countries in the world, including most Caribbean countries”.

The authors are confident that the legal framework inherent in the Bill will provide for transparency and non-discrimination in the issuance and monitoring of licences and authorisations to use the spectrum; seamless interconnection and access between and among telecommunications networks and services; and price regulation where required to ensure competition and protect consumers.

Next week I will examine the extent to which these objectives are reflected in the Bill and consider the implications – legal and otherwise – of the state’s attempt to remove unilaterally the right of the company to have its exclusive licence extended.

Assent for Bill came 628 days after passage in National Assembly

On Wednesday we collected from the Office of the President the most recent batch of Official Gazettes. Included among these was a Legal Supplement to the Official Gazette dated October 12, 2010 and containing the Forest Act # 6 of 2009.

The Bill for that Act was passed on January 22, 2009 and assented to by the President on October 12, 2010 – 628 days after the passage in the National Assembly. Under the constitution the President has twenty-one days to assent to bills.

Not only does the President continue to show contempt for the country’s constitution which he has taken an oath to uphold, but it seems that he and his Minister of Legal Affairs and Attorney General are comfortable backdating of the Official Gazette, arguably the country’s most important legal publication.

One must wonder whether such questionable conduct and delay was Vaitarna related or is the result of some persuasion from Norway.

Confusion at the Deeds Registry

Introduction
During the past week Mr Leon Rockliffe, attorney-at-law, has written two letters on developments affecting the Deeds Registry, arguably the most important depository of business information in Guyana, the regulator for businesses and companies, and the authority for a number of critical functions regarding real property. In that sense its vital importance to property rights, the registration of businesses, the incorporation and registration of companies, and the repository of corporate documents cannot be overstated.

The Deeds Registry derives its ‘modern’ origin to 1919 and the act “to regulate the Office of the Registrar of Deeds, and to amend the law relating to the execution and registration of Transports and Mortgages and other Deeds.” Space does not permit the reproduction of the several duties and functions of the Registry, all of which remain, but now fall under a Deeds Registry Authority, a new corporate entity but without supervisory oversight.

In 1999 the government passed an act piloted by the current Attorney General Mr Charles Ramson, setting up a Deeds Registry Authority the functions of which are set out in section 4 of the act as –

(a) the functions assigned to the Registrar and to the Registry under –

i the Deeds Registry Act;
ii the Companies Act 1991;
iii the Business Names (Registration Act);
iv the Powers of Attorney Act;
v the Bills of Sale Act;
vi the Trademarks Act;
vii the Patents and Designs Act;
viii the Civil Law of Guyana Act;
ix the Land Registry Act; and
x any other written law or other legal document.

Retroactivity
As is clear, these are not insignificant matters and suggest that Mr Ramson, Attorney General and Minister of Legal Affairs should have treated the act with more seriousness. The (Deeds Registry) Act had been lying idle for the better part of ten years since like the Amerindian Act, it required an Order to bring it into force. Recently, the same Attorney General signed Order 31 of 2010 published in the Official Gazette of Saturday, November 13, 2010, purporting to bring the act into force from October 1, 2010, approximately six weeks earlier. That publication was the cause of the two letters by Mr Rockliffe who correctly pointed out that there were a number of steps to be taken before the act could be brought into force.

This was a grave oversight by Mr Ramson who would be expected to be familiar with the contents of the 1999 act. The Order is clearly out of place and instead of adding clarity, we have confusion reminiscent of the bringing into effect the 1991 Companies Act on May 25, 1995 without informing the Registrar of Companies. In the case of the Deeds Registry Act the staff in the Registry have not only been kept in the dark but have been unable to exercise their employment rights under the act.

Recall and review
Mr Rockliffe raises some further issues. Despite the creation of an authority there are no directors and it would seem that the Registrar who becomes the Chief Executive Officer would report direct to the Minister! There is an advisory board consisting of the Chief Justice which creates a patent potential conflict of interest, the Solicitor General, a position that has been effectively abolished more that 12 years ago and the State Solicitor, a post which ceased to exist for close to seven years.

With all these problems, it would be hard to find any person who would not ask that the Order be recalled and the act amended to make it more sensible and practical.

The Deeds Registry needs major inputs to enable it to function properly and effectively. Some lawyers relate horror stories of improprieties, inadequate staff and consequently poor service. It is true that there have been some improvements recently and some of the staff make exceptional efforts in still challenging circumstances. But something is wrong when New Guyana Limited, the publicly owned but PPP controlled publishers of the Mirror, a recipient of government advertisements can operate for close to twenty years without submitting an annual return.

Different strokes
NICIL, the government controlled company to which moneys due to be paid into the Consolidated Fund are diverted and spent illegally and without regard for accountability has similarly been allowed to exist without filing returns. Compare this with say, the Linden Legal Aid Centre incorporated in 2007 and struck off the register of companies earlier this year for non-filing. It was subsequently restored after filing the statutorily required documents.

Linden Legal Aid was not alone, but is among close to 200 companies that were struck off the register of companies in 2010. The reluctance or failure of the Deeds Registry to act against NICIL and the New Guyana Company Limited at least requires an explanation for the uneven treatment which gives the appearance of discrimination, something forbidden in our constitution.

Conclusion
What is the point of having property rights guaranteed under the constitution if the records are so inadequately kept as to risk the loss of ownership and to encourage improprieties? This column has also pointed out the need to review and amend the Companies Act 1991 which has remained untouched for nearly twenty years. It is hard to believe that our learned Attorney General would not be aware of some of the inadequacies of the nine specific acts administered by the Deeds Registry, their need for updating, and the making of new and revised regulations. Such deficiencies go to the rule of law, property rights and a modern business infrastructure. If he is aware and chooses to do nothing, then we have a bigger problem than a poorly issued Order 31.