Oct 27, 2013 News
The bankers’ association has joined calls by the private sector for adjustments to the laws to halt the flow of dirty money through the financial system. In a published statement in yesterday’s Kaieteur News, the Guyana Associations of Bankers (GAB) urged for action to end the current political impasse which has left the amendments to the Anti–Money Laundering and Countering Financing of Terrorism Act (AML/ CFT Act) in limbo.
The Bills laid earlier this year are critical to stop impending sanctions against Guyana for not having proper mechanisms in place to reduce the likelihood of monies, derived through illegal means, ending up in the hands of terrorists, Government said.
Guyana has until next month to pass the legislations in the National Assembly before a regional review by an oversight body. However, the legislations when tabled earlier this year by Government were sent by the Opposition to a special select Parliamentary committee to be studied. This was despite protestations by Government that the country could face sanctions.
Earlier this week, in the absence of the Opposition, the Government completed work in the select committee and announced that it be taking it back to the National Assembly for debate and hopefully passage. According the banks, a strong AML/CFT legislative framework is fundamental to the continued functioning of all of Guyana’s commercial banks, in accordance with acceptable international standards.
“It is important that Guyana enact the recommendations of the CFATF (Caribbean Financial Action Task Force) which include certain amendments to the current law that are comprehensive and satisfactorily compliant with all international and domestic requirements.”
GAB members include Bank of Baroda, Citizens Bank Guyana Inc., Demerara Bank Limited, Guyana Bank For Trade and Industry, Republic Bank (Guyana) Limited and the Bank of Nova Scotia.
According to paid advertisements, in terms of implications from the non-passage of the laws in time, Guyana could very well see bank-to-bank relationships and business between the country’s commercial banks and foreign banks be halted for an unknown amount of time.
“This includes relationships with commercial banks in sister CARICOM territories. The foreign banks may opt not to do business at all with Guyana’s banks if Guyana’s AML/CFT laws do not meet the standard required by the requisite AML/CFT bodies (in this case the CFATF) and are thereby inadequate to provide those institutions with the requisite level of comfort to conduct business with local banks.”
There had been many warnings of implications but no real clarity until now from the banking sector. Also likely to be affected is adequate access to foreign exchange in a timely manner.
“Members of the public may experience difficulty in sending to or receiving money from overseas through commercial banks and cambios if the correspondent banking relationships with foreign banks is jeopardized as there may be no bank to bank relationships to foster this activity.
Payments in a timely manner to persons overseas for provision of goods and services may be affected.”
Likely to be affected also will be the “Letter of Credit” issued by Banks in Guyana which could be refused by the overseas banks. “The total effect of the foregoing is that the impact to the integrity of the local banking sector could significantly reduce the level of international financial activities that Guyana’s commercial banks can engage in.”
GAB made it clear that a strong AML/CFT legislative framework is fundamental to the continued functioning of all of Guyana’s commercial banks in accordance with acceptable international standards. The issue has sharply divided the National Assembly with the Alliance For Change, the smaller of the two Opposition parties, saying it is willing to consider backing the legislative changes once Government agrees to establish the long-overdue Public Procurement Commission.
A Partnership For National Unity (APNU), Parliament’s largest Opposition faction, has made it clear that it has not made an input in the legislations and is unlikely to back it in the current format when it is tabled in the National Assembly sometime next month. The current 10th Parliament has been mired in deadlocks, including budget cuts since the 2011 General and Regional Elections. For the first time in 18 years, the ruling People’s Progressive Party/Civic lost its majority, although retaining the Presidency.
The one-seat edge held by the combine Opposition has been proving difficult with the ruling party now seriously considering heading to snap elections.
The issue of the anti-money laundering legislations has drawn not only the banks, but the insurance companies and private sector bodies.
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