Creating paper trails or more headaches?

December 12, 2010 | By | Filed Under News 

… Anti-money laundering laws hit Cambios

Changing foreign currency your relatives send this year may include a little more hassle if you need more than US$100 converted.
On Tuesday last, December 7, the Financial Intelligence Unit (FIU) of the Ministry of Finance met with several Cambio operators. According to Head of the FIU, Paul Geer, of the 13 listed Cambios, 12 were represented at that meeting.
The meeting centered on the Anti-Money Laundering and Countering the Financing of Terrorism Act of 2009. The Cambio representatives had the intricacies of the legislation explained to them by the representatives of the FIU.
They were told of the new identification and information requirements for persons wishing to conduct transactions and the threshold amounts above which such information is required. They were also told of the situations and occurrences that require reporting under International and local Anti-Money Laundering laws.
Several city cambios however have expressed their dissatisfaction not with the new legislation but with its implementation, saying that they are ready and willing to comply but the customers are not.
The Cambio operators who spoke on the condition of anonymity have pointed out that they are losing customers as they try to bring their transactions into compliance with the law. Customers are now required to give their name, date of birth and address as well as produce their National Identification Cards or other applicable official identifying documents whenever they seek to change monies above the threshold value of US$100 or its equivalent.
According to the operators, some of the customers were not happy about the need for an identification card since they did not always travel with this document, but of greater concern to all of the customers was the need for their address.
Apparently many customers have expressed fears about the security of divulging their addresses and other personal information, especially considering the nature of the transactions that they are undertaking.
Those customers who are not about to meet the requirements for changing the money have decided to take their business elsewhere. Elsewhere in this case is not to another licensed cambio but to the “money changers” that congregate at certain spots in the city.
As one Cambio operator pointed out, “These guys have no overhead expenses, they don’t have to pay for a license each year and they don’t have to do all of the paperwork.”
The operator went on to note that this year’s cambio license cost G$500,000 and that the businesses are required to file a multitude of returns to the Central Bank already.
The operators took pains to note that they have no objections to the legislation, with the exception of the reporting threshold which they feel should be US$10,000 to match the amount that persons are required to declare at any international airport in the world, saying, “If that is the case the world over why should it be any different here?”
They do have issues with the time frame within which they are required to implement these changes saying that they were told that they needed to be in full compliance with the law by Wednesday next, December 15, bearing in mind that they were told of their obligations just a week before that date.
The operators are of the opinion that the public needs to be better informed and that there needs to be proper media advisories similar to the ones circulating when proof of address was required by the local Banks earlier this year. They also pointed out that if such a step were taken then they would also need an extension on the date for full compliance.
Paul Geer however had a different take on the matter when he spoke to this newspaper last evening. Mr. Geer noted that three of the larger cambios have called him saying that they are not experiencing trouble with their customers. We were unable to reach those cambios.
He also pointed out that the regulations have been in the public for months and indeed there is a Legal Supplement laying out the act in the Official Gazette on October 9, 2010.
On the issue of advertisements explaining to the public, Mr. Geer pointed out that in the case of the proof of address required by the Banks, those advertisements were paid for by the Banks themselves.
Mr. Geer went on to say that this is a normal reaction of people when things are changed, but he was of the opinion that it was very necessary that paper trails be created especially in foreign exchange transactions.
In the meanwhile, with literally millions of dollars expected to flow into the country over the next few weeks as remittances and cold hard foreign currency, the effects of the new legislation remain to be seen.

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