Money laundering

Stabroek News
December 8, 1999

The Money Laundering (Prevention) Bill was published in the Official Gazette on the l0th October, l998, and had its first reading in the National Assembly on the 29th October, l998. The second reading is scheduled for the l5th December, l999. In the meantime the government has, commendably, published the bill in the newspapers for public notification and comment. Very few people read the Official Gazette.

Money laundering legislation already exists in many other countries and is part of the ongoing fight against organised crime, in particular the drug barons. The object of the exercise is to make it difficult for them to `launder' their illegal gains and convert them into bank accounts or legitimate businesses. If this can be done effectively it means the proceeds of crime have to be held in cash which is extremely inconvenient if large amounts are involved.

The bill creates the offence of money laundering which is defined to mean engaging, directly or indirectly, in a transaction that involves property that is the proceeds of crime, knowing or believing same to be the proceeds of crime or receiving, possessing, managing, investing, concealing, disguising, disposing of or bringing into Guyana any property that is the proceeds of crime, knowing or believing the same to be the proceeds of crime. If an offence is committed by a body of persons, whether corporate or incorporate, every person who is a director, senior officer or member, will be guilty unless he can prove that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of the offence.The offence of aiding and abetting is also created. The penalty for money laundering is not less than $200,000 nor more than $l,000,000 and up to seven years in jail. It is also an offence to tip anyone off that an investigation is under way or to destroy or conceal documents. Provisions are made to freeze and forfeit property by order of court.

The bill creates a Supervisory Authority which shall be the Bank of Guyana until the Minister of Finance appoints one. The Authority will receive reports from all financial institutions which are required to keep business transaction records for six years and to report any suspicious transaction to the Authority. They are required to pay special attention to all complex, unusual or large business transactions, whether completed or not, and to all unusual patterns of transactions, and to insignificant but periodic transactions which have no apparent economic or lawful purpose. When the report is made in good faith the financial institution shall be exempt from any liability for breach of any restriction on disclosure of information or otherwise. Failing to report a suspicious transaction is a criminal offence. The question whether a reasonable suspicion has been formed shall be determined objectively having regard to all the facts and surrounding circumstances. The Authority can go to the court for a mandatory injunction against a bank which has failed without reasonable excuse to comply with the law.

From the time the bill is passed persons bringing in to Guyana or taking out more than US$l0,000 in foreign currency will be required to declare same at the airport. There are also provisions for co-operating with courts or authorities overseas.

This bill is an essential part of the war against drugs and will be widely welcomed. The reporting requirements for banks and other financial institutions seem reasonable though they may welcome dialogue with the relevant minister and with the Bank of Guyana to agree on guidelines to help them identify suspicious transactions. Such guidelines may already exist in overseas jurisdictions which have had similar laws for some time and it would be worth enquiring. The reason for this is the need to avoid the harassment of legitimate companies and persons in the normal conduct of their business

Wide publication of the bill is a useful expedient that the government should consider in other cases, particularly where the length of the bill makes this feasible. Alternatively, the Official Gazette should be printed in a timely manner and be made much more widely available than it now is.

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