Diamond dealers are facing increased scrutiny now with authorities moving to ensure that they fall under newly enacted, tougher regulations that targets money laundering.
The Financial Intelligence Unit (FIU) over the weekend gave notice to dealers, whether they operate individually or as companies, to make contact with them to start a registration process.
The notice is also for persons who were registered before.
Attention has been placed, in recent years, to especially the gold trade which has huge potential for money laundering. It appears that the attention has now shifted to the diamond trade.
FIU is an autonomous body responsible for requesting, receiving, analyzing and dissemination of suspicious transaction reports and other information relating to money laundering, terrorist financing or the proceeds of crime. It was established and operates within the ambit of the Anti Money Laundering and Countering the Financing of Terrorism Act (AMLCFTA) 2009 and its regulations were amended to include harsher penalties and tighter monitoring.
According to an advertisement in the Sunday edition of Kaieteur News, FIU noted that it had been established under the Anti-Money Laundering and Countering the Financing of Terrorism (AML CFT) Act No. 13 of 2009.
It notified “all persons or entities, who or which deals in precious and semi-precious stones, that they are required to comply with, inter alia, the obligations set out under Sections 15, 16, 18 and 19 of the said Act. Those obligations include the submissions of specified reports and other information to the FIU.”
The regulator asked the dealers to make contact with his office before June 30, 2017, to initiate a registration process.
“Persons or entities that were previously registered are still required to contact the FIU for further information/guidance,” the notice said.
The FIU compiles reports for competent and law enforcement authorities if there are reasonable grounds to suspect that transactions involve money laundering, proceeds of crime or terrorist financing.
Among other things, it is suppose to extend legal assistance to foreign jurisdictions with respect to production orders, property tracking, monitoring, and forfeiture or confiscation orders.
It has the power to request and receive information from any reporting entity, any supervisory agency and any law enforcement agency, and any other competent authority in Guyana or elsewhere for purposes other regulations.
There are several institutions which fall under FIU reporting. These include betting shops, gold dealing, cambios, pawnbrokers, casinos, credit unions, insurance, banking, car dealers, lotteries, internet gambling and even charities.
With regards to diamond trading, it has long been known that it is a preferred payment by drug and arms dealers and others in the illegal trade.
There have been reports of diamonds from Venezuela and Brazil making its way into Guyana and being sold overseas as coming from this country. How true this is and to what extent, if any, has not been made clear.
Earlier this year, Government announced that it has initiated a review of Guyana’s Kimberly Process Certification Scheme (KPCS) because of the spike in diamond production.
While briefing residents in Kwakwani and Ituni on the work that the Ministry of Natural Resources is currently engaged in, Minister Raphael Trotman touched on the KPCS review.
”We have seen a spike in our diamond production which makes us feel good; we just have to make sure that we are not processing somebody else’s diamonds from someplace else,” Minister Trotman said.
In 2016, royalty from diamonds exceeded the budgeted amount of $24.0M for the period January to October 2016.
For last year, 109,651 metric carats of diamonds were declared which earned the government $73,277,347 in fees and royalties.
In February, Cabinet approved the request for the expertise of a legal consultant to review the KPCS used for certifying diamonds.
The KPCS was launched in 2003 in a bid to clean up the international diamond trade after it was recognised that diamonds were being used to finance wars and terrorism.
FIU, as the frontline body to tackle dirty money, is being strengthened to deal with the new regulations.
A banker, Matthew Langevine, is its new head.
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