The trade world has changed drastically in the last decade with online shopping and global restrictions biting deep on traditional businesses.
In Guyana, tough regulations have been enacted in recent years to tackle anti-money laundering and the financing of terrorism.
In the area of trade, Guyana ran into major hurdles in recent years with first the restrictions on Greenheart exports to the United Kingdom. Then there were the restrictions on Catfish to the US. With Gilbacka a family of Catfish, Guyana was hard hit recently by the actions.
In all the cases, the UK and US authorities are insisting that they want to ensure safety of food and with regards to Greenheart, to ensure that it was coming from legal sources.
In other words, it is now being insisted that Guyana and other countries that want to trade with big players like the US and Europe must ensure it is able on request to produce proof that all goods are coming from safe sources and not from illegal ones.
A critical area that is of concern now for Guyana is gold.
For more than a decade now, amidst high world prices, gold has been bringing in precious foreign currency, climbing to the top of the table where it has been reigning as the biggest earner.
However, the introduction of the Anti-Money Laundering/Combating the Financing of Terrorism (AML-CFT) regime, has been meeting some resistance.
This past week, Chairman of the Guyana Gold Board, Gabriel ‘GHK’ Lall, was willing to engage on the challenges facing the gold sector. He has a tough job.
He made it clear that there is no “wriggle room” if Guyana intends to continue trading in gold.
“A CFATF fourth round of oversight team is due here later this year. Guyana must demonstrate a high standard of compliance and effectiveness in the measures employed to address AML and CFT issues and activities.
“This is where the proof is in the pudding, and the Gold Board has to deliver, in view of its significant presence in the national economy, and gold’s historical contributions as a money laundering instrument.”
The statements of Lall would be grim.
“This fourth round is a crucial test of where things stand in Guyana. The GGB is committed to fulfilling its role and is pulling out all stops. The assistance, cooperation, and full compliance of all those involved in the local gold industry, particularly state-licensed dealers is vital,” he warned.
Lall, who had decades of experience on Wall Street, before retiring home in Guyana, stressed that the new dispensation is part of the changing world of how business is now being done.
“If we don’t play along, in the language that all Guyanese can understand, gold is not Catfish. Gold does not have the wriggle room. We do not have that luxury to afford sanction of a ban on our shipments of gold, on our exports. We cannot afford it, the country cannot afford it. Our dealers cannot afford it…our country cannot afford it.”
Lall insisted that Guyana has to get it right with all the cooperation of the various players, from staffers to miners to dealers.
“The Gold Board has spent a lot of money and has to spend a lot more to get systems in place and to get the kind of expert staffing and needs to address the issues. Essentially, what we are talking about is information security and anti-money laundering compliance. We are talking about internal audit capabilities; we are talking about the countering of financing of terrorism. So it is a whole menu of area for which you have obligation. This obligation is not subject to much interpretation.”
The official said that Guyana has no choice but to comply with the demands.
And it is simple in the language…Guyana has to put systems in place where checks can be done to verify where the gold is coming from…from the particular dredge or mining concession.
The idea is to weed out conflict-free gold and establish a verifiable system to trace the gold from the market back to the mine.
“It has to pass the compliance test; it has to pass the anti-money laundering test; it has to pass the countering the financing of terrorism test, and it has to pass the smell test,” Lall said in making it clear the responsibilities of the Gold Board.
No Wriggle Room
“I understand and appreciate that people are complaining. The reality is that the Gold Board does not have the luxury to push back. This is the whole country that is vulnerable to any lapse. If we lapse at the Gold Board then the country suffers. The board takes it seriously; the Ministry takes it seriously; the government takes it seriously.”
However, Lall acknowledged that the going is tough for the regulatory agency. It does not have an enforcement arm. Rather, Gold Board has to depend on sister agencies like the Guyana Geology and Mines Commission and the Environmental Protection Agency and the Guyana Revenue Authority for assistance.
“There is so much riding on this. I cannot over emphasize that this Board has tremendous responsibilities placed on it. We are committed. It helped that more than 90 percent of the board at last count has a vote of confidence by the minister and Cabinet to be returned.”
According to the Chairman, whether Gold Board knows the miner or not, the regulations are demanding that miners and dealers have to produce documentations when transacting business.
“We can’t take any word anymore. There must be a paper trail. We have been told in no uncertain terms that if there is no documentation then no money should be paid.”
Gold Board has been holding workshops and outreaches and talking to its dealers to pass the message on- comply or face the worst.
Among some of the documents that must be produced to help verify production at mines are Traders’ Licences; Miners Permit; Dredge Licences; Shop Licences and evidence of barter arrangements… everything has to have a piece of paper, he said.
“Declarations must have supporting documents, so when the regulators look to us for that, we must have that. If it is visit to our miners and dealers, they must be able to deliver that. Whatever business we are in, as long as it is above board, I always said, you come take a look, because I want to know I pass muster and I am doing my duty as I should.”
Lall spoke of improving relations with the mining bodies, recently the guest speaker at a meeting of the Guyana Gold and Diamond Miners Association and with engagement with the Guyana Women Miners Organisation.
He acknowledged that the Gold Board may not be able to resolve all issues, but the consultations have been netting results.
With the dealers among the big stakeholders, Lall disclosed that he has been meeting them.
“We have been clear with what our obligations are and we have been clear how the licences and compliance regime is very thorough and we are expecting cooperation. We feel that we have very astute businessmen and they know what is involved here and they want to get on with their business, but they want also to work with us to ensure that everybody is on the same page and the Guyana Gold Board is allowed to do its work. We have to make sure that their books are available, whether it is during a surprise visit or not.”
Lall admits that the level of cooperation is not where it should be.
“We are getting some cooperation, I must be frank. I wish it was a little bit more robust, more forthcoming and the Board itself is working very assiduously with dealers to see that everybody understand their responsibilities.”
The Chairman also noted that while there should be an attitude of zero exceptions, in Guyana there are hundreds of miners who transient, but it is being insisted that all transactions be accompanied by identification.
“Our partners- the Royal Canadian Mint, Techmet, the London Bullion Market Association (LBMA), the US Security and Exchange Commission and the OECD (Organisation for Economic Co-operation and Development) have set standards for conflict free gold. Like I said before, there is absolutely no wriggle room. We have to comply. We have to get our houses in order. Our partners are encouraged by what they saw, but they have also raised the bar. We are working hard to meet the requirements.
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