Are APNU’s proposed amendments evidence-based?

I do not think that anyone will disagree that Guyana should be compliant with the international norms on anti-money laundering and countering financing terrorism (AML/CFT), and to correct existing deficiencies. At this time, the Caribbean Financial Action Task Force’s (CFATF) advice suggests that Guyana’s plan of corrective action is appropriate. Hence, the opposition’s push to formulate ideal or optimum regulations without valid information is troubling and perhaps unnecessary, given the CFATF’s advisement. And notwithstanding the corrective action now required through amendments, in the future, additional amendments and adjustments to sustain compliance status will become necessary. Construction and reconstruction of AML/CFT measures is an evolving process, so there is no need now to believe that additional proposed amendment s will solve all the problems once and for all. The AML/CFT plan of action has to evolve on the basis of evidence-based information. But first, let me introduce some caveats on anti-money laundering measures before proceeding further to Guyana’s status on these matters.
In many parts of the world, and perhaps more so in the developing world, large segments of the population are more likely to engage in cash transactions rather than in formal financial services (banks, electronic money transfers, etc.), making for less transparency in transactions.
The international-setting body on AML/CFT the Financial Action Task Force (FATF) in June 2011 provided support for financial inclusion (Koker and Jentzsch, 2013), that is, support for increased use of banks and other formal financial services as opposed to using mere cash transactions; FATF supports this line because financial inclusion results in greater transparency allowing for better law enforcement of AML/CFT regulations. FATF’s support for greater financial inclusion is based on the premise that the more a customer uses formal financial services, the less that customer would use informal (cash) transactions.
But FinScope and Research ICT Africa’s (RIA) household surveys on Botswana, Kenya, Namibia, Nigeria, South Africa, Tanzania, Uganda, and Zambia contradict that premise, showing that increased use of formal financial services did not lead to a decreased use of cash transactions (Koker and Jentzsch, 2013); and Koker and Jentzsch argued that if FATF wish to see some alignment between financial inclusion and financial integrity, there needs to be better knowledge of customer choice between formal and informal financial services. Nevertheless, in order to protect privacy and in light of global public spying, many people may be more comfortable with cash transactions.
Let me now proceed to Guyana‘s action on AML/CFT. The modus operandi of the Guyana National Assembly (legislature) suggests a laissez-faire approach to legislate against money laundering and financing terrorism.
The People’s Progressive Party/Civic’s (PPP/C) tabled the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT ) (Amendment) Bill in the National Assembly on April 22, 2013. The Bill was intended to correct deficiencies identified in Guyana’s third round Mutual Evaluation Report, approved by FATF’s regional body the CFATF at its Council of Ministers’ meeting in May 2011 in Honduras; the CFATF ruled at that meeting that Guyana be put on an expedited list and must do a follow-up at every Plenary.
At its May 2013 Plenary, the CFATF required Guyana to correct its deficiencies by November 2013, as its progress was found to be unsatisfactory. In fact, Guyana did not have an approved AML/CFT (Amendment) Bill comprising corrective measures to present to the CFATF Plenary by this deadline of November 2013 because the combined one-seat majority opposition A Partnership for National Unity (APNU) and Alliance For Change (AFC) rejected it.
Following this rejection in November 2013, APNU proposed amendments to the AML/CFT (Amendment) Bill at the final moment just before the Paris Plenary in February 2014. APNU had ample time between November 2013 and February 2014 to present its proposed amendments. Now who precipitated some delay in parliamentary approval of corrective measures ensconced in the AMLCFT (Amendment) Bill, earmarked for CFATF’s presentation at the Paris Plenary?
And even though Guyana was not on the agenda for the Paris Plenary of the FATF, it would have been a show of good faith had the Bill with the corrective action been approved by the National Assembly, since the CFATF would have reported on Guyana’s compliance status at that meeting. In this situation, the CFATF and its parent body the FATF more than likely raised the moral red flag against Guyana.
On February 27, 2014, the opposition, in a brazen show of ignoring the national interest in the National Assembly, validated its sense of zero urgency on the AML/CFT (Amendment) Bill. According to local press reports, the opposition did not perceive meeting the CFATF’s deadline of February 28, 2014 as a big thing and further that no apocalypse was coming any time soon. So much for upholding national interest and national integrity by elected representatives of the people!
And again, at the National Assembly sitting of February 27, 2014, the opposition shamelessly fingered the PPP/C Government for delaying approval of the AML/CFT (Amendment) Bill because the Chief Parliamentary Counsel’s refinement of the main opposition APNU proposed amendments was incomplete, resulting in the Bill not reaching the holy ground of the legislature.
The opposition claimed that the Government should have ensured completion, since the Chief Parliamentary Counsel is an appointee of the Attorney General’s Chambers. Recall that APNU had ample time between November 2013 and February 2014 to present its proposed amendments, but it chose to propose its amendments at the eleventh hour, thereby giving the Chief Parliamentary Counsel a limited time and space to execute the ‘refinement’ work.
CFATF’s Financial Adviser Roger Hernandez recently came to Guyana and advised that the AML/CFT (Amendment) Bill was appropriate, and any further attempt at adding and/or subtracting amendments could reduce its effectiveness. APNU, in press reports, claimed that its proposed amendments are intended to strengthen AML/CFT measures.
However, given CFATF’s advisement on the AML/CFT (Amendment) Bill as appropriate, it is possible then that APNU in its last ditch efforts to add or subtract to the Government’s amendments, may be using optimum (ideal) strategies to obtain information on amendments that are unknown or unknowable (Simon, 1987); and so, with no available evidence-based information, the optimum approach may produce unworkable amendments. It is more practical to use the satisficing method (Simon, 1990) to choose amendments. The satisficing approach uses available limited evidence-based information to select the most feasible amendments when not enough is known about future options. But on the contrary, if APNU is not using the optimum approach, then clearly its action is tantamount to forestall approval of the Government’s AML/CFT (Amendment) Bill.
Where are we now? The CFATF required Guyana to approve the AML/CFT (Amendment) Bill by February 28, 2014, in order to assess Guyana’s progress in preparation for the CFATF Plenary in Santo Domingo in May 2014. At this point, Guyana has made progress in tabling the AML/CFT (Amendment) Bill to correct some deficiencies. But it has been unable to execute action to improve its AML/CFT compliance regime because of its failure to pass and implement appropriate legislative reforms. These reforms refer to the blocked AML/CFT (Amendment) Bill, lying dormant in the National Assembly, resulting in Guyana becoming branded as non-compliant, through the kind courtesies of the combined one-seat majority opposition APNU and the AFC.
By Dr. Prem Misir

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