Resolving the impasse over money laundering and terrorism prevention legislation

The recommendation by the Caribbean Financial Action Task Force (CFATF) that its members must exercise caution in their financial transactions with Guyana leaves only a narrow window of a few months before the country becomes the object of heightened scrutiny and possible condemnation by the international Financial Action Task Force.

The decision by the CFATF is a direct consequence of the failure by the National Assembly of Guyana to pass the amendments to the Anti-Money Laundering and Combatting the Financing of Terrorism (Amendment) Bill 2013. Making the case for the Government, its spokespersons simply state that the amendments are what the CFATF has called for. The opposition parties and civil society have expressed concerns not only about the proposed amendments but about some of the provisions in the principal Act. Among the objections raised are provisions that are claimed to be in violation of the Constitution, the absence of a strong executing authority and the role of political operatives in the administration of the Act.

Having reviewed a sample of the regional statutory framework, I am satisfied that there is no single model which the CFATF prescribes for meeting the requirements of the Forty Recommendations and Nine Special Recommendations of the Financial Action Task Force. I am also satisfied about the validity of many, if not all of the concerns expressed by civil society and the parliamentary opposition and about the call by the AFC for a key constitutional body to regulate public procurement to be established forthwith.

There is a real possibility that even if the amendments were to be passed with the support of one or both of the parliamentary opposition parties, the constitutionality of a number of provisions in the Act could be challenged in the courts. I do not think it sensible or advisable to rake such unnecessary risks.

Earlier this week I had a useful telephone conversation with a leading member of the Government who sought my views on a way out of the impasse. I shared with the person my thoughts. I now do so publicly. These are my recommendations for breaking the deadlock.

1. That the National Assembly should consider scrapping the Anti-Money Laundering and Combatting the Financing of Terrorism Act 2009, recall the proposed amendments and replace both with the Barbados 2011 legislation which fully complies with all the recommendations of the Financial Action Task Force. That Act also avoids the several fundamental objections to Guyana’s 2009 Act and proposed 2013 amendments. Of course, the Barbados Act would require certain amendments in respect to other legislation that are to be amended.

I would also suggest three substantive amendments: the first dealing with the appointment and removal of the Executive Head, bringing these under the Public Accounts Committee (PAC) or the Public Service Commission; bringing the National Procurement and Tender Administration under the Anti-Money laundering Authority referred to in the next paragraph; and third, requiring reporting to the National Assembly direct as in the case of the Auditor General’s Report.

Specifically, the Barbados legislation establishes an institutional mechanism whereby the responsibility for maintaining oversight of the national Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) framework lies not with a single individual but with an Anti-Money Laundering Authority (AMLA). The AMLA is made up of eleven members, drawn mainly from the key public sector agencies that relate directly to anti-money laundering activity. The executive functions of the Authority are carried out by the Financial Intelligence Unit (FIU) which is headed by the Director and comprises of other public officers.

2. That Guyana seek technical help from Trinidad and Tobago and Barbados to assist in formulating and executing a strategy to exit its present CFATF status. I had suggested several months ago to seek assistance from Trinidad and Tobago which was in a similar predicament some years ago. I am unsure whether he did so.

3. That the President, the Government and the National Assembly agree an unambiguous timeline to operationalize key institutions such as the Public Procurement Commission, the Integrity Commission, the Ombudsman, the Local Government Commission, the Ethnic Relations Commission and the naming of a date for local government elections.

I believe that the insistence by the Government to have a no-objection condition inserted in the Procurement Act would be a violation of Article 212 FF of the Constitution of Guyana. This requires that “political interference be eschewed” in relation to Commissions and to minimise the influence of the executive and maximize public perception of impartiality in the operation of the commission”.

For those uncomfortable with the adoption of a Barbados-model legislation I would remind them that the Barbados Companies Act 1982 was a principal influence on the Companies Act 1991 of Guyana and that the Barbados Act was itself modelled after the Canadian Business Corporations Act. To give another example: Guyana benefitted substantially from technical assistance from Trinidad and Tobago in connection with the introduction of Value-Added Tax in 2007. Nor does it need to be stated that the flawed Guyana 2009 AML/CFT Act was itself an imported product!

I hope that all parties to move expeditiously and simultaneously on all these matters and spare Guyana the embarrassment and consequences of being labelled an international pariah. This is the season of goodwill. Let it also be a season for common sense, patriotism and compromise.

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