Feb 07, 2009 News
…eagerly awaits money laundering legislation
The Central Bank of Guyana is at present unable to detect dirty money – money that has been earned through illegal means and has been subsequently laundered.
This is according to Governor of the Bank of Guyana, Lawrence Williams, during a press briefing yesterday. He said that the Central Bank was eagerly awaiting the enactment of the Anti-Money Laundering and Countering the Financing of Terrorism Bill.
The piece of legislation, when enacted, will allow for greater regulation and scrutiny of the financial system in Guyana, and will allow for the detection of dirty money.
Deputy Governor of the Central Bank, Dr Gobind Ganga, did, however, point out that there are several pieces of anti-money laundering legislation in place, but these did not allow for adequate penalties.
Money laundering is the practice of engaging in financial transactions in order to conceal the source, and/or destination of illegally gained money, and is a main operation of the underground economy.
In the past, the term “money laundering” was applied only to financial transactions related to organised crime; but today its definition is often expanded by Government regulators, such as the United States Office of the Comptroller/Controller of the Currency, to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting.
President Jagdeo, in his most recent press briefing, whilst commenting on the scrutiny of the asserts of Customs officers implicated in a recent fraud, had mentioned that he has urged the Finance Minister to accelerate the work of the select committee which is currently assessing the piece of legislation.
A select committee takes charge of a Bill after it is laid for the first time in the National Assembly.
The committee then examines the various clauses to ensure that there are no conflicting or contentious issues.
The Anti-Money Laundering and Countering the Financing of Terrorism Bill was first laid in the National Assembly in June 2007, and was sent to a special select committee for review before debate.
Now retired Attorney General and Minister of Legal Affairs, Doodnauth Singh, presented the Bill, which seeks to prevent money laundering, the financing of terrorism, and to allow for the civil forfeiture of criminal assets.
The legislation, when enacted, is expected to provide for oversight of export industries, real estate, alternative remittance systems, and other financial institutions.
Among other things, the Bill provides that the Director of Public Prosecutions (DPP) may apply to the High Court for a restraining order against any realisable property held by the accused, or specified realisable property held by a person other than the accused, in both money laundering and terrorism cases.
In connection with property that directly or indirectly constitutes proceeds of crime and the value is not less than two million dollars, the court may make an interim order prohibiting the person from disposing of or diminishing its value during the period of fifty-six days from the date of making the order, the Bill outlines.
It seeks to empower a High Court judge to make a restraining order prohibiting the respondent, or any other specified person, or any other person having notice of the order, from disposing of the property, unless otherwise instructed.
The Bill also provides that money laundering and terrorist financing are offences for the purposes of the law relating to extradition, or the rendition of fugitive offenders.
Of significance, the Bill provides that all monies derived from the fulfillment of forfeiture and confiscation orders contemplated in the Act shall be paid into the Consolidated Fund.
In 2000, Guyana passed the Money Laundering Act, but it was believed to be riddled with loopholes that prevented the Financial Intelligence Unit (FIU) established under the Act from carrying out its mandate.
Crimes covered by the Money Laundering Prevention Act include narcotics trafficking, illicit trafficking of firearms, extortion, corruption, bribery, fraud, counterfeiting, and forgery. The law also requires that incoming or outgoing funds over US$10,000 be reported. The new legislation is generally intended to track money transfers and activities of commercial banks and other financial institutions. It will also tackle the financing of terrorist organisations.
It is also slated to complement the work of the Financial Intelligence Unit (FIU), which has received major criticisms from the United States since it came into operation in 2003.
A final draft of the legislation was completed, but because it was handed over about two weeks prior to the dissolution of Parliament, in April 2006, the legislation could not have been passed.
The existing Money Laundering Prevention Act of 2000 establishes the Guyana Revenue Authority, the Customs Anti-Narcotics Unit, the offices of the Attorney General and Director of Public Prosecutions, and the FIU as the authorities responsible for investigating money laundering crimes.
More importantly, the legislation will bring Guyana in line with the “40 + 9 Recommendations” of the Financial Action Task Force (FATF), an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing.
The FATF is a “policy-making body” created in 1989 that works to generate the necessary political will to bring about legislative and regulatory reforms in these areas.
The FATF monitors members’ progress in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and
The FIU was supposed to have investigated cases of money laundering and alert the police, but according to the US, drug trafficking and money laundering appear to be benefiting Guyana’s economy, particularly in the construction sector.
The 2007 US Drug Report on Guyana noted that Guyana is neither an important regional nor offshore financial centre, nor does it have any free trade zones.
The scale of money laundering is thought to be large, relative to the size of the economy, with some experts estimating that the informal economy is 40 to 60 percent of the size of the formal sector. The report said that investigating and prosecuting money laundering cases is not a priority for law enforcement in Guyana.
According to the report, the lack of adequate legislation and resources has resulted in the Government of Guyana making no arrests or prosecutions for money laundering in 2006.
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