–underscore major challenges for financial sector
TWO long-established local financial institutions, the Guyana Bank for Trade and Industry (GBTI) and the New Building Society (NBS), have underscored the major challenges for the financial sector which lie ahead if the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Amendment Bill is not passed.
In GBTI’s annual report, the bank’s Chief Executive Officer (CEO), John Tracey, noted that the non-enactment of the critically important piece of legislation could see Guyana battling the “most serious” challenge it has had to face in many years.
At the Annual General Meeting on April 30, he said, “An uncompromising and uncertain legislative environment has already resulted in the country being blacklisted by Caribbean Financial Action Task Force (CFATF).
“With another deadline looming, international sanctions seem likely, as key amendments to the legislation still cannot happen.”
The final deadline for Guyana to ensure compliance with the recommendations of CFATF is May 29.
According to Tracey, the consequences of international sanctions are “dire” and he called for serious political maturity to avoid this.
“The Foreign Account Tax Compliance Act (FATCA) becomes effective in July 2014. This new legislation on reporting requirements places further obligations on Banks and increased operations expenditure.
“This USA law requires foreign institutions, such as GBTI, to report on US citizens’ holding of accounts above a certain threshold,” Tracey said, referencing the moves already being made to tighten the operations of the financial sector.
The CEO pointed out that the challenges for the organisation’s operations are clear, moving forward, and efforts must be made to support the operations of local entities.
GBTI’s Chairman, Robin Stoby, added his concerns on the non-passage of the bill.
He said, “The banking community remains disappointed that necessary measures required to bolster and strengthen the legislative regime to combat money laundering were the victims of the ongoing political impasse.
“We join with the other members of the local banking fraternity in urging meaningful dialogue aimed at ensuring that our country’s anti-money laundering laws are compliant with global standards, while at the same time respectful of our constitutional safeguards.”
DISASTROUS EFFECT
Chairman of NBS, Moen McDoom, at its most recent AGM on April 26, highlighted the disastrous effects of the AML/CFT Amendment Bill’s non-passage.
He said, “Guyana is at risk of being blacklisted for having been unable to present legislation on anti-money laundering and countering the financing of terrorism. This will certainly have a disastrous effect on the financial service sector and many businesses.”
According to him, like other organisations, the NBS remains hopeful that the political parties will reach a consensus to ensure that the AML/CFT Amendment Bill is passed in the National Assembly.
“This must be done,” McDoom stressed.
The Society’s Chief Executive Officer (CEO), Ahmad Khan, echoed similar sentiments.
He said, “The Society remains optimistic that the major stakeholders, including our political leaders, will soon be able to resolve the already long stalemate and pass the required legislations in Guyana.
“…this will strengthen the country’s ability to deter money laundering and the financing of terrorism, as well as to prosecute offenders.
“…the New Building Society is hopeful that the major stakeholders will remain engaged to ensure the amendments to the AML/CFT legislation, as recommended by the CFATF, are passed in the Parliament.
“Once passed, our beloved country can continue in its developmental path and ensure free movement of finances in all business transactions, both local and foreign.”
According to him, the challenges of blacklisting are real, and would severely impact the operations of businesses in the financial sector.
Khan said, “Financial institutions in Guyana have been facing an uphill task in carrying on its business of conducting financial transactions, as a result of Guyana being unable to amend its legislation on anti-money laundering and countering the financing of terrorism.”
OAS CALL
One of the other more recent calls, at the international level, for the passage of the AML/CFT Amendment Bill came from the Secretary-General of the Organization of American States (OAS), José Miguel Insulza, on May 2.
He issued another call for the Parliament to approve the Bill, which has been under consideration by the Legislature for several months.
Insulza stated that passage of this Act is crucial to bring the country up to standard on these matters, noting that several of Guyana’s CARICOM partners have already adopted similar legislation in compliance with the requirements of the CFATF.
Further delays, according to the highest ranking official of the OAS, could result in unnecessary damage to the country’s financial stature.
The Secretary-General appealed to all political parties and other stakeholders in Guyana to exercise leadership and understanding in seeking prompt passage of the AML/CFT Amendment Bill.
Insulza also offered the cooperation and support of the OAS through the Inter-American Drug Abuse Control Commission (CICAD), noting that Guyana’s draft law is fully consistent with the most recent recommendations of CICAD’s expert group on money laundering, which were in turn endorsed by CICAD commissioners at their 55th Regular Session in Washington DC this week.
The final drop-dead deadline for Guyana to have an enacted AML/CFT Amendment Bill, on May 29, if not passed can see Guyana being recommended to the international body, the Financial Action Task Force (FATF), for review by the International Cooperation Review Group (ICRG). If that is done, Guyana could face further sanctions, including being put on the international blacklist.
(By Vanessa Narine)