OP:ED - Gold smuggling and money laundering

OP:ED – Gold smuggling and money laundering

Mar 07, 2023 Features / Columnists, News, The GHK Lall Column

By GHK Lall

Kaieteur News – The Attorney General himself is the one who received the report last year. It is the eye-popping amount of about US$2.2B involved in the not so murky world of tax evasion and gold smuggling contributing to money laundering activities in Guyana. I knew it was bad, but not this bad. This much could also be said confidently: US$2.2B is on the conservative side.

GHK Lall

Clearly, we have a problem, and it is big, with bigger implications for Guyana. It cannot be anything else when in the span of approximately five years, there is this estimated US$2.2B of criminal activity of this type that has happened. It is about half of the 2022 national budget, and over a third of this year’s, both of which were records. It would be revealing, I think shocking, as to where all three of those criminal components are today, given what has happened since 2020. The first was that President Ali swore to dismantle onerous rules and regulations, with a sharp eye on the gold sector. Then, the Hon Vice President said publicly something to the effect that reports of gold smuggling are largely exaggerated, a figment of overblown imaginations. After that, confidentiality closed all conversations. Now there is this an un-confidential report in the AG’s lap, a real hot potato of unmanageable dimensions, notwithstanding his brave speeches.

Regarding what the Vice President put into the public domain about gold smuggling being overblown, that was his standard fiction at work. If anything, it stands to reason that matters have likely gotten worst. For in that 2016-2020 period there were many wails and resistances from the powerful to what was being introduced for the first time and, more importantly, being followed through on consistently. Considering the reach of some connections, the power of their attempted pushbacks, the range of circumventions, and the many willing hands in official circles, that were all the norms, I can only ponder on what has taken hold since August 2020, especially with a bow to the President’s promise of dismantling, and what resulted from such.

For many were/are the official hands lending surreptitious assistance to smugglers, tax evaders, and launderers that rewarded at different official levels. Back then, many were the political escalations, I believe, that ran into roadblocks, due to a handful of unmoving servants who took these things as they should be. That is, they held the line, and men who found their way of doing business come into question had to get creative. In today’s Guyana, none of this is needed anymore because some of the bigger, smarter, more resourceful operators in the gold smuggling, tax evasion, and money laundering businesses now have political access and muscle to power their causes. Of course, nobody is so blatant as to call what they are involved in, anything so crude as smuggling or money laundering. The protective language is about too much red tape, too much regulation, and too many uncooperative human obstacles blocking the free flow of legitimate business.

Regarding the latter, I am still to hear anyone who has not sworn that his business is wholly and truly legitimate. Grand sums of money, in cash no less, have greased the political wheels at powerful heights during that recently concluded interval that convulsed this country into frenzies. Well-received political donations must be looked at for what they are: investments for the future, meaning, that there comes a time when payback (a return) is expected. When that time comes, politicians are called and reminded of debts owed, which incentivize political powers to lean on bureaucrats for particular outcomes to be realized. Or, to remove them to allow for smoother, supposedly risk-free passage of the questionable. To put otherwise, public servants in crucial spaces get the message about when to look the other way, go easy on what glares in the face, and let certain things pass. If not, they are shown the door, and not so courteously. The AG should know what is meant: donate in 2020, collect rewards thereafter.

Denials aside, we must face real-life Guyana. From all indications, we have a huge gold smuggling problem. This means that an associated money laundering culture has to flourish as a byproduct. Citizens should recall foreign exchange squeezes involving the US dollar in the city not too long ago. I am hearing some echoes of that today. I believe that the partial easing of American sanctions on Venezuela may send existing border smuggling exercises in another direction, or at least result in lesser volumes of business, and less conspicuous. On the other hand, with all the oil-related cash rushing into Guyana for downstream support ventures provides the perfect cover for money laundering operations. For the slow, or resistant, there are hotels and resorts and other startups under which dark money can find a home. Tax evasion accompanies smuggling and laundering. I had warned that the Yankees are serious about this. US$2.2B stands as the tip of the iceberg.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)