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Written Submission to the Select Committee on the AML+CFT (Amendment) Bill 2013

Guyana’s managing of anti-money laundering activities has not been encouraging. A SN editorial to mark the third anniversary of the Money Laundering (Prevention) Act 2000 since its enactment described it as a “bear in hibernation”. Yet, the list of persons who pronounced on the Act at various stages included then Finance Minister Sasenarine Kowlessar who after the act’s assent announced that no decision had been made as to who would supervise the act; then President Jagdeo, who one year after the act was passed said no funds had been budgeted for its implementation; then Director of Budget Dr. Ashni Singh who pronounced that “money-laundering could have significant influence on currencies, market prices and financial stability”; then Home Affairs Minister Gajraj who in discussing money-laundering spoke of non-working millionaires and the “Siamese twins of the narcotics scourge”; his successor Ms Gail Teixeira who called on consumers to boycott drug lords’ businesses; and Commissioner General Khurshid Sattaur who had announced that GRA’s software would pinpoint money launderers.

Not only did such high level politicians and executives address their minds to money-laundering, the Cabinet in 2001 established a special task force under Dr Roger Luncheon to oversee the implementation of the Act. The report of that special task force, even if not updated, can help to accelerate the work of the Select Committee.
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The rise of inequality

Introduction
This article draws heavily on a commentary in Ram & McRae’s 2013 Budget Focus. One of the issues identified in the segment of the commentary dealing with inequality, a companion of poverty, is a National Minimum Wage for Guyana. Since then, the Minister of Labour announced a National Minimum Wage for the private sector of $35,000 per month, $8,000 per week or $200 per hour. I have not seen the report of the committee appointed by the Minister of Labour which made the recommendation, but it would be interesting to learn of the statistical, economic and social factors that could inform the anomaly of a private sector minimum wage that is considerably lower than the public sector minimum wage.

Another issue dealt with in the commentary was education and its relevance to poverty. Well, in an ironic twist, in what is now more than a rumour, a senior government official is selling their Pradoville 2 house for more than two hundred million dollars, an example of inequality whereby land belonging to a poor community can be expropriated and handed out to the politically powerful to be enriched.

It is not that inequality is a uniquely Guyanese phenomenon. In fact, a couple of years ago, four then famous and powerful men ‒ Hu Jintao, David Cameron, Warren Buffett and Dominique Strauss-Kahn – who would not usually have a lot in common, were all worrying and warning loudly about the dangers of a rising gap between the rich and the rest. Mr Hu put the reduction of income disparities, particularly between China’s urban elites and its rural poor, at the centre of his pledge to create a “harmonious society.” Mr Cameron said that more unequal societies do worse “according to almost every quality-of-life indicator.” Mr Buffett, one of the world’s richest men, has become a crusader for a higher inheritance tax, arguing that America risks an entrenched plutocracy without it. And Mr Strauss-Kahn argues for a new global growth model, claiming that gaping income gaps threaten social and economic stability. Mr Buffett may be surprised to learn that we abolished our inheritance tax, which we called estate duty, as a form or economic recovery.

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Playing with money laundering and terrorism legislation

Introduction
Guyana joined the Caribbean Financial Action Task Force (CFATF) in 2002, twelve years after it was established in May 1990. The CFATF is an associate member of the Financial Action Task Force (FATF), the international body established in 1989 charged with examining countries’ money laundering techniques and trends, reviewing the actions which they had already taken, and setting out the measures that still needed to be taken to combat money laundering. Following the terrorist attacks of September 11, 2001, the FATF added terrorist financing to its mandate.

By 2002, Guyana had already passed the Money Laundering (Prevention) Act 2000 which granted to the Minister of Finance the discretion to appoint the Bank of Guyana or some fit and proper person as the Supervisory Authority for the Act. Favouring the latter course, some time in 2005 the Minister of Finance handpicked Mr Paul Geer to head a Financial Intelligence Unit located in the Ministry of Finance. Mr Geer’s experience included five years as head of the Guyana Bank of Trade and Industry, which he left abruptly – officially for personal reasons ‒ in a golden parachute and after a meeting of the bank’s Board of Directors.

Despite the allocation by the National Assembly for the FIU of more than two hundred and seventy-five million dollars since Mr Geer took up the position, the unit has had virtually no success in pursuing even the limited objectives of the 2000 Act. Not surprisingly then, Guyana’s reputation as a prosecutor of money-laundering has no gloss. Some have blamed the deficiencies of the Act but Mr Geer did not help the government’s case by his unavailability to meet the press or unwillingness to answer questions about the FIU.

Following some critical reviews of the by then limited 2000 Act and the country’s anti-money laundering efforts, the government introduced the Anti-Money Laundering and Countering the Finance of Terrorism Bill on June 4, 2007. After nearly two years and fifteen sittings of a Select Committee the National Assembly on April 30, 2009 passed the Bill. Reinforcing the perception that he was never serious about pursuing crime and its proceeds, then President Jagdeo took one hundred and seven days before he assented to the Bill on August 14, 2009. And then it took another 87 days before the publication of Order # 22 of 2009 to bring the Act into force.

The later Act was equally poorly administered prompting President Jagdeo some time in 2011 to publicly castigate the unit for its inability to meet even basic annual reporting obligations to the National Assembly. Put bluntly, the FIU of the 2009 Act and its predecessor Supervisory Authority under the 2000 Act have been disastrous failures, so much so that we probably could have done without them, without noticing their absence.

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‘Plain Talk’ angered some top leaders of Private Sector Commission

Last week’s Plain Talk so angered some top leaders of the Private Sector Commission (PSC) that they began a buzz with email exchanges describing that programme and another on Channel 9 as constituting a “blistering attack” and “serious attempt to discredit the PSC.” It exhorted the troops, so far embarrassingly unsuccessfully, “to act.” Yet, amidst all this vituperation, one of the chief protagonists admitted to me by email that he had not seen the programme or knew its topic.

The topic of Plain Talk was ‘Budget 2013 – an Epilogue’ with Raymond Gaskin. During the hour long programme, the focus of which was an 11-point letter by Messrs David Granger and Khemraj Ramjattan to President Ramotar a few days prior to the 2013 Budget, Mr Gaskin, while defending the private sector in its wider sense named Messrs Dookhoo, Urling, Webster and Gouveia as individuals who collectively do not come as “a neutral professional private sector body,” but as “the government’s friends”; “persons with whom the government is comfortable.” Mr Gaskin also named and compared Mr Carville Duncan with former Ethnic Relations Commission Chairman-turned-government minister Mr Juan Edghill, whom Gaskin described as having always been a Civic in civil cloth.

Fortunately, the private sector is bigger, more diverse, measured, balanced and independent than the PSC and those at its helm. Unfortunately, by their silence the wider membership does nothing to help the PSC regain the authority and independence it lost when Mr Mike Correia clammed up after Dr4 Jagdeo embarrassed him at a GuyExpo opening a few years ago.

This Sunday I will give the PSC leaders another opportunity to look at the programme by having it rebroadcast on WRHM Channel 7.

The leaders can then make a reasoned assessment whether they may have over-reacted and whether Mr Gaskin’s opinion of them has any merit, or is shared by the public.

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On the Line: 2012 Annual reports of Caribbean Container Incorporated, Sterling Products Limited and Guyana Stockfeeds Incorporated

Introduction
To avoid getting caught up in a backlog of annual reports, Business Page today reviews the annual reports of three of Guyana’s public companies – Sterling Products Limited which held its annual general meeting on April 19, Caribbean Container Incorporated (CCI) which held its annual general meeting on April 30 and Guyana Stockfeeds Limited whose AGM is scheduled for May 23. It is perhaps co-incidental that these companies have some striking similarities: they are all public companies but with a dominant shareholder, and none is among the big league of Guyana’s public companies. Indeed CCI accounts for 1.02% of the market capitalisation of the top ten public companies, Stockfeeds 1.07% and Sterling Products 1.12%. Cumulatively the three companies account for less than 3.25% of the market capitalisation of the top ten companies.

In their annual reports, each of the three companies reported better results in 2012 than in 2011, a trend among all public companies. Stockfeeds reported an increase in year-on-year profit after tax of 3.2% while Sterling declared an increase in after tax profit of 39.3%. CCI appears to have transformed a loss into a profit but this is almost entirely attributable to a reduction in book entry depreciation because of a change in the estimated useful life of assets.

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