Money laundering prevention legislation for Parliament this month
Kaieteur News
April 9, 2007
Attorney General and Minister of Legal Affairs, Doodnauth Singh, is expected to table legislation in the National Assembly this month, with the intention of closing loopholes in the existing Money Laundering (Prevention) Act of 2000.
Government sources told the Kaieteur News last week that the new legislation will help track money transfers, activities of commercial banks and other financial institutions.
Moreso, the source added that the legislation will also tackle the financing of terrorist organisations.
The government is said to be fine-tuning the final draft of the legislation which was crafted after a series of consultations with the Bank of Guyana, commercial banks and other institutions.
According to a Government source, the new legislation will complement the work of the Financial Intelligence Unit (FIU), which has received major criticisms from the United States since it came into operation in 2003.
The unit was set up to keep a tab on persons who commit crimes and then disguise the origin of their criminal money so that they can use it more easily.
More importantly, the legislation will bring Guyana in line with the “40 + 9 Recommendations” of the Financial Action Task Force (FATF), an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing.
The FATF is a “policy-making body” created in 1989 that works to generate the necessary political will to bring about legislative and regulatory reforms in these areas.
The FATF monitors members' progress in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures, globally.
Secrecy is the basis for all money laundering, whether that of the drug trafficker, organised criminal, terrorist, arms trafficker, blackmailer, or credit card swindler.
Money laundering generally involves a series of multiple transactions used to disguise the source of financial assets so that those assets may be used without compromising the criminals who are seeking to use the funds.
Through money laundering, the criminal tries to transform the monetary proceeds derived from illicit activities into funds with an apparently legal source.
The FIU was supposed to have investigated cases of money laundering and alert the police, but according the US , drug trafficking and money laundering appear to be benefiting Guyana 's economy, particularly in the construction sector.
The 2007 US Drug Report on Guyana noted that Guyana is neither an important regional nor offshore financial centre, nor does it have any free trade zones, yet the scale of money laundering is thought to be large, relative to the size of the economy, with some experts estimating that the informal economy is 40 to 60 per cent of the size of the formal sector.
The Report said that investigating and prosecuting money laundering cases is not a priority for law enforcement.
According to the Report, the lack of adequate legislation and resources has resulted in the Government of Guyana making no arrests or prosecutions for money laundering in 2006.
The 40 Recommendations of the FATF provide a complete set of counter-measures against money laundering covering the criminal justice system and law enforcement, the financial system and its regulation, and international co-operation.
According to the FATF, the recommendations are neither complex nor difficult, nor do they compromise the freedom to engage in legitimate transactions or threaten economic development.
They set out the principles for action and allow countries a measure of flexibility in implementing these principles according to their particular circumstances and constitutional frameworks.
Though not a binding international convention, many countries in the world have made a political commitment to combat money laundering by implementing the 40 Recommendations.
Initially developed in 1990, the Recommendations were revised for the first time in 1996 to take into account changes in money laundering trends and to anticipate potential future threats.
More recently, the FATF completed a thorough review and update of the 40 Recommendations (2003).
The FATF has also elaborated various Interpretative Notes which are designed to clarify the application of specific Recommendations and to provide additional guidance.
Following the September 11, 2001 attacks in the US , nine special requirements were issued by the FATF, which dealt primarily with financing of terrorist operations.
Among the nine recommendations was that each country should criminalise the financing of terrorism, terrorist acts and terrorist organisations.
Countries should ensure that such offences are designated as money laundering predicate offences.