HEAD of State Donald Ramotar made it clear that his administration is not opposed to calling Local Government elections, but hinted that the commencement order for this process, as well as general elections, could be based on the impacts of the ruling by the Financial Action Task Force (FATF).The Caribbean Financial Action Task Force (CFATF), on May 28, pronounced on Guyana’s failure to address deficiencies in its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. Through a missive to its members, CFATF effectively blacklisted the country on the international scene when it referred Guyana to FATF.
The President, at a press conference held at State House, said, “I don’t know what will happen if the impact of this anti-money laundering bill hits home very, very hard on our economy and whether we might have to go back and have another mandate.”
He added that as Head of State, he cannot close his eyes to the political reality that obtains as the current state of affairs.
Mr. Ramotar said, “I would prefer to go to Local Government Elections, but I cannot shut my eyes to the political reality that exists and make a bland promise that I would go to Local Government Elections tomorrow, as I would have done had we had the majority in the parliament at this point in time, and we would not have been in the position that we are in today.”
Guyana is still reeling from the impacts of being regionally blacklisted by CFATF last November.
According to the Chairman of the Private Sector, Ramesh Persaud, in a prior interview, there is already evidence of a decline in investments in the private sector.
He said, “Loans and advances to the private sector by the commercial banks is one of the reliable indicators of private sector growth and investments. This was $40.8B in 2004 and rose to $128.2B at the end of December, 2013.
“At the end of the first quarter of 2014, the balance dropped to $127.5B and has been stagnant for the last three months.
“This is a sign that there has been a decline in the investments made by the private sector. This is linked to a lack of confidence and a high level of skepticism by private enterprises in the economy due to the uncertainties brought about by the possibility of sanctions.”
Persaud stated too that the classification of Guyana by CFATF and the referral of Guyana to FATF lumps both legitimate and illegitimate businesses of Guyana into the same high risk category.
He said, “Legitimate law abiding businesses are going to feel the consequences even more, as money launderers and financiers of terrorism will continue to find sophisticated methods of by-passing the system as they are good at scheming and plotting and they would not mind the extra cost associated with doing so.
“However, legitimate businesses have no alternative, but to comply with the onerous systems and bear the extra cost. For this, the consumer will eventually suffer as business models are built to pass on and recover costs fully.
Stakeholders from the private sector, the diplomatic corps and regional, as well as international, partners are calling for Guyana’s leaders to act with haste in the interest of the nation.
Upon referring Guyana to CFATF, the regional watchdog recommended that its member countries take several counter-measures that were outlined by CFATF. These include the requirement of enhanced due diligence measures; introducing enhanced reporting mechanisms or systematic reporting of financial transactions; refusing the establishment of subsidiaries or branches or representative offices in Guyana; and taking into account the fact that financial institutions from Guyana that do not have adequate AML/CFT systems and limit the business relationships or financial transactions with the country.
FATF’s next plenary meeting is slated for June 23 to 25, 2014 in Paris, France, at which time the international body is likely to put Guyana up for review by its International Cooperation Review Group (ICRG).
Written By Vanessa Narine