Tag: Anti-Money Laundering

The following is the text of recommendations made to Mr. David Granger, Leader of the Opposition, in connection with the Anti-Money Laundering and Countering the Finance of Terrorism (Amendment) Bill 2013. In addition to these recommendations, I provided him with a copy of my submission to the Select Committee on May 24, 2013 (see here)

In my view there is need not only to address the amending legislation but the principal Act as well. Indeed I do not believe that there is anything particularly troublesome about the amendments: the problems are with the principal Act.
Continue reading “Written Submission to the Select Committee on the AML+CFT (Amendment) Bill 2013”

Introduction
The recommendation by the Caribbean Financial Action Task Force (CFATF) that its members must exercise caution in their financial transactions with Guyana leaves only a narrow window of a few months before the country becomes the object of heightened scrutiny and possible condemnation by the international Financial Action Task Force.

The decision by the CFATF is a direct consequence of the failure by the National Assembly of Guyana to pass the amendments to the Anti-Money Laundering and Combatting the Financing of Terrorism (Amendment) Bill 2013. Making the case for the Government, its spokespersons simply state that the amendments are what the CFATF has called for. The opposition parties and civil society have expressed concerns not only about the proposed amendments but about some of the provisions in the principal Act. Among the objections raised are provisions that are claimed to be in violation of the Constitution, the absence of a strong executing authority and the role of political operatives in the administration of the Act.
Continue reading “Resolving the impasse over money laundering and terrorism prevention legislation”

The mandate
Now let us turn to the wider mandate of the FIU with respect to the prevention of money-laundering and combatting the financing of terrorism. The Act singles out Financial Institutions, and defines these along with Designated Non-financial Business or Profession in Schedule 1. Financial Institutions are mainly those engaged in any of the services normally provided by banks and other financial institutions while the second category includes casinos, real estate agents, dealers in precious metals, attorneys-at-law, notaries, other independent legal professionals and accountants engaged in certain specified activities and trustees.

The Act also defines as reporting entities persons carrying on a range of activities, also listed in Schedule 1, including the acceptance of deposits, granting of loans including consumer credit, financial leasing, money transfer agencies, cambios, pawn-broking, issuance of credit cards, travelers cheques, used car and car part dealers, real estate agents, betting shops, lotteries, and transactions undertaken by accountants and attorneys acting for clients in relation to specific activities, exporters and importers of valuable items and dealers in real estate.

Under pain of draconian penalties, financial institutions and reporting entities have serious and extensive obligations under the Act. For the purpose of this column, suffice it to say that reporting institutions and entities are required to maintain adequate records to enable the identification of their customers; to establish and maintain records of all transactions with full particulars of the customers and the transactions; to pay attention to all complex or unusual large business transactions; to monitor their business relationships with customers; to appoint a Compliance Officer to ensure compliance with the Act; to establish and maintain internal policies, procedures, controls and systems to implement the customer identification requirements and recordkeeping and retention requirements; to establish an audit function to test the policies and procedures; and to train their officers, employees and agents to recognise suspicious transactions; and most importantly to submit to the FIU any transaction which they suspect is connected to the proceeds of criminal activity, money laundering or terrorist financing.

Despite defining Designated Non-financial Business or Profession in Schedule 1, the term is not used anywhere in the Act.
Continue reading “Those FIU (non)reports – continued”

Introduction
Following questions raised by the parliamentary opposition, the Minister of Finance earlier this month presented to the National Assembly what purported to be annual reports of the Financial Intelligence Unit headed by Mr. Paul Geer, Director. Such reports are required under the Anti-Money Laundering and the Combatting of Financing of Terrorism Act 2009 (AMLCFTA). The Act was passed on April 30 2009 but not assented to until August 14 of that year, close to three months beyond the twenty-one days allowed by the Constitution.

Let us look briefly at the requirements of the Act in respect of annual reports and accompanying audited financial statements. Section 9 requires the Director “to keep proper accounts and other records.” Sections 9 and 110 set out the timeline for preparing auditing, and tabling in the National Assembly the financial statements and report of the Financial Intelligence Unit (FIU) as follows:

Deadline	Action required
By March 31	Prepare the statement of accounts for the preceding year
None specified	Submit to Auditor General for audit
No later than June 30	Director to submit to the Minister of Finance a report comprising information on the financial affairs, operations and performance of the Financial Intelligence Unit, including the amounts paid into the Consolidated Fund under the Act, along with the audited annual statements of accounts.
No later than one month following receipt	Minister of Finance to lay the documents in the National Assembly.

Continue reading “Those FIU (non)reports”