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CFATF cautions against more amendments to anti-money laundering law; opposition refuses to budge

CFATF’s Financial Advisor Roger Hernandez

The Caribbean Financial Action Task Force (CFATF) Friday evening urged swift passage of the government-sponsored amendments to the financial crimes law by February 28 because tinkering with them can pose greater risks.

But the combined opposition- A Partnership for National Unity (APNU) and the Alliance For Change (AFC)- Friday vowed that they would not vote for changes to the 2009 Anti  Money Laundering and Countering and Financing of Terrorism (AML/CFT) Act unless government gives into its demands.

At APNU’s request, CFATF’s Financial Advisor Roger Hernandez briefed the special parliamentary select committee on the AML/CFT and told them that if the bill was not passed by the 65-seat National Assembly by next week Friday the country could eventually be globally blacklisted by the France-headquartered global watchdog- Financial Action Task Force (FATF).

“Once you are listed, effectively what this means is that the FATF is telling the world that these countries have serious AML deficiencies and that countries should take appropriate measures to deal with the risks emanating from Guyana because of these particular AML/CFT deficiencies,” he told a news briefing moments after meeting with the select committee at Parliament Building.

The select committee is scheduled to meet next week Wednesday when it would examine the proposed amendments.

Countermeasures- another word for blacklisting in C/FATF jargon- could mean individual countries requiring their financial institutions to implement appropriate measures raging from severe or stricter requirements for opening of accounts with their financial institutions and tighter controls for transactions between correspondent banks.
Blacklisting he, explained, could also affect Guyana’s access to international financing and financing markets because additional requirements would make the process more difficult. He added that international development agencies would take note of Guyana’s status and that could affect access to development funding and technical assistance.

The CFATF official further stated that if Guyana did not pass the legislation next week, the 29-member Caribbean organisation would nominate Guyana for a prima facie review by the FATF’s International Cooperation Review Group (ICRG) when it meets in June 2014.

Emerging out of that review process, Guyana could be placed on one of three tiers with the most severe being a total blacklist as has been done to North Korea and Iran. The second tier is for those countries that have not given a political commitment to address significant AML/CFT deficiencies or have not formulated an action plan with the FATF to deal with them. The lowest tier is for countries that have issued a political commitment to implement the reforms and have also formulated an action plan in collaboration with the FATF which sets out deadlines for those measures to be implemented.

Stressing the importance of Guyana’s legislature passing the bill next week, he said Guyana would have to then submit a report to the CFATF on its follow-up process. “The reason that this is necessary is that the CFATF has to analyse the bill for compliance and a report has to be made to the plenary this May as to what sort of level of compliance the bill has with international standards. On the basis of that report, the plenary would then be able to make a decision going forward with Guyana, whether Guyana should be subject to further counter measures or whether should be sent or should be recommended to the FATF for the ICRG review,” the CFATF Financial Advisor added.

While Hernandez refused to comment on APNU’s proposed amendments at this time on grounds of preserving CFATF’s independence, he stated that the amendments tabled by the government one year ago were good enough. “The amendments right now are compliant with the recommendations that were made concerning Guyana’s meeting the AML/CFT standards,” he said.  The CFATF official said his Trinidad-headquartered organisation could only comment on bills after they have been finalized or draft bills with the understanding that they could be changed.

He warned that if APNU’s proposed amendments were taken on board, there are two perils: Some of the amendments that have been put forward deal with previous areas of the Act that were deemed compliant.

“The concern that we have is that the amendments being put forward may make those areas that were formally compliant, non-compliant. There is a risk with that,” he said.

The second peril he pointed to was that some amendments were “outside the remit of the recommendations”. “We have no opinion on those things because we only deal specifically with the recommendations. It’s up to the legislature to decide about those particular measures,” he said.  He would only say that CFATF raised some concerns about the implementation and effectiveness of some of the recommendations.

In the final analysis, he said it was for the political parties to decide and then CFATF would conduct its assessment. “We are very concerned. We would like the country to be fully compliant across the board in all those recommendations so we would not like to have a recommendation that was previously compliant then it resulting it being non-compliant later on in the future,” he added.

But APNU point-man on the Select Committee, Carl Greenidge said that after the meeting with the CFATF official he was convinced that his party’s proposed amendments to the principal act could be made without any threat that the regional watchdog could throw them out.

Greenidge said the CFATF official was told that even if agreement was reached on the amendments, they would not be passed by the opposition-controlled House unless steps are taken to operationalize recently passed laws and a process kicks in for President Donald Ramotar to eventually assent to opposition-sponsored bills that he has already refused to sign. “It will not be passed, that is out of the question,” said Greenidge when asked if there was no agreement and government takes back its amendments to the House.

When told that the CFATF official said it was best to go ahead with the government-sponsored amendments, Greenidge said that would be unacceptable. “That is Mr. Hernandez’s opinion. That is for him to express but we are not going to accept his opinion,” said Greenidge.

APNU wants the AML/CFT law to include specific criteria for the appointment of officials of the Financial Intelligence Unit and other enforcement and regulatory agencies associated with combating money laundering, the establishment of an Anti Money Laundering Authority, widening of police and customs powers to seize GUY$2 million anywhere in Guyana once there is reasonable suspicion and a role for parliament in the appointment of officials to the FIU and related agencies.

AFC Leader, Khemraj Ramjattan insisted that his party would only support passage of the government-tabled amendments if steps are taken to establish the constitutionally required Procurement Commission as a mechanism it says would partly help stamp out money laundering through the award of multimillion dollar contracts for goods and services. “It doesn’t leave the AFC in any different position… What it means now is that if the PPP wants to meet the deadline of the 28th (of February) has seven or eight days now to establish that commission and put it into operation,” he said.

Asked what emphasis was CFATF paying to the enforcement rather than only the enactment of AML/CFT laws, Hernandez said once the legislation has been enacted, CFATF would asses its implementation before Guyana could be taken off the Caribbean-wide blacklist. “It’s not just a matter of passing the legislation. Guyana will also have to demonstrate implementation before they can be taken off the regional list so that could take anywhere from eighteen months to two years or even longer,” he said.