Con­vic­tions needed

-AG tells SOCU, FIU

Stabroek News Sunday - - FRONT PAGE - By Zoisa Fraser

At­tor­ney Gen­eral Basil Williams SC on Fri­day sounded a warn­ing to both the Spe­cial Or­gan­ised Crime Unit (SOCU) and the Fi­nan­cial In­tel­li­gence Unit (FIU), say­ing that they need to se­cure con­vic­tions as they are crit­i­cal to show­ing the ef­fec­tive­ness of mea­sures Guyana has taken to com­bat money laun­der­ing.

Williams was at the time ad­dress­ing two dozen par­tic­i­pants at a half-day sem­i­nar that was hosted by the Min­istry of Le­gal Af­fairs and the An­ti­Money Laun­der­ing/Coun­ter­ing the Fi­nanc­ing of Ter­ror­ism (AML/CFT) Na­tional Co­or­di­nat­ing Com­mit­tee on prepa­ra­tion for the Fourth Round of Mu­tual Eval­u­a­tions by the Caribbean Fi­nan­cial Ac­tion Task Force (CFATF).

SOCU and the FIU were among the su­per­vi­sory au­thor­i­ties rep­re­sented at the sem­i­nar, which was held at the Bank of Guyana (BoG). Also rep­re­sented were the BoG, the Gam­ing Au­thor­ity, the Guyana Ge­ol­ogy and Mines Com­mis­sion and the Guyana Rev­enue Au­thor­ity.

Williams said that af­ter a “painful” jour­ney, Guyana is presently in the fourth round of mu­tual eval­u­a­tions, which is sched­uled for the fourth quar­ter of 2021 although a pre-on­site visit may start a year prior to that date.

He warned that if “we don’t pre­pare our­selves and ex­e­cute, you will be back in the hole, as Trinidad is right now. In fact the At­tor­ney Gen­eral has just writ­ten… me as the Chair of CFATF [Caribbean Fi­nan­cial Ac­tion Task Force] com­plain­ing that their sit­u­a­tion has been mis­de­scribed and mis­rep­re­sented.” Williams pointed out that Guyana has to get it right. “It looks as though we have a lot of time. We don’t have a lot of time. There is a lot of things to do and there­fore we have to know from the out­set in your par­tic­u­lar niche what you are re­quired to do,” he said.

He also noted that gov­ern­ment is look­ing to re­shape and trans­form Guyana’s im­age. “The re­gion must know that there is a shift right now and so when they use to dog us out it was for sim­ple mat­ters. They must see us as a coun­try with stan­dards and a coun­try that has due reg­u­lar­ity,” he said.

It was ex­plained that the fourth round deals with the 40 FATF rec­om­men­da­tions and im­me­di­ate out­comes. Williams stressed that the most im­por­tant as­pects of this round are tech­ni­cal com­pli­ance and ef­fec­tive­ness. He said it is still be­ing said, and right­fully so, that Guyana still has se­ri­ous money laun­der­ing de­fi­cien­cies, which in­clude lay­ing charges and se­cur­ing con­vic­tions. “There­fore the FIU and SOCU are both put on no­tice be­cause they both know how they mea­sure ef­fec­tive­ness and that has to do with con­vic­tions. So, there is no way we could grad­u­ate out of the fourth round with­out show­ing con­vic­tions,” he said, while cit­ing the case of The Ba­hamas, where sus­pi­cious trans­ac­tion re­ports were recorded but no con­vic­tions. He noted that both Guyana and Ba­hamas are in a “pool” which al­lows for a year grace pe­riod to get things in or­der, fail­ing which it is the “hole.” He said once a coun­try finds them­selves in this po­si­tion, FATF is­sues a pub­lic state­ment, which puts the world on no­tice to adopt coun­ter­mea­sures against that par­tic­u­lar coun­try. These coun­ter­mea­sures in­clude “not deal­ing with you, not deal­ing with your in­sti­tu­tions un­less… there is en­hanced due dili­gence,” he added.

Di­rec­tor of SOCU Syd­ney James also spoke at the sem­i­nar and he said that the main chal­lenge for the agency is the ad­e­quacy of staff, given that most are “reg­u­lar” po­lice of­fi­cers who are not fa­mil­iar with fi­nan­cial crimes. As a re­sult, those ranks are cur­rently un­der­go­ing train­ing. The unit’s bud­get, he added, is an­other area of con­cern and he voiced his hope that these and the other chal­lenges can soon be ad­dressed.

James said ini­tially there were chal­lenges with the leg­is­la­tion but that has since been sorted out and the unit is in a “bet­ter place now.” He an­tic­i­pated that the num­ber of pros­e­cu­tions and pos­si­ble con­vic­tions will “rise and would as­sist us as we at­tempt to pro­vide favourable sta­tis­tics for the fourth round.” He pointed out that co­he­sive­ness among stake hold­ers is nec­es­sary if Guyana is to progress to a sat­is­fac­tory stage for this round.

Eval­u­a­tion process

Mean­while, FIU’s Se­nior Com­pli­ance and Out­reach of­fi­cer Ali­cia Williams ad­dressed the sem­i­nar on the pro­ce­dures for the fourth round eval­u­a­tion.

She ex­plained that it in­volves a three-step process–pre-on­site, on­site and post on­site—dur­ing

which as­ses­sors will get the op­por­tu­nity to meet with Guyana to sort out is­sues be­fore the mu­tual eval­u­a­tion report is adopted. This process, she said, can take be­tween six to 12 months, with the pre-on­site com­po­nent pos­si­bly start­ing in the fourth quar­ter of 2020, one year early, and the post-on­site com­po­nent last­ing as much as six months.

She said the prime con­tact and the date for the on-site visit has to first be con­firmed. The prime con­tact, she ex­plained, is the per­son in the ju­ris­dic­tion who is ap­pointed for any com­mu­ni­ca­tion with CFATF Sec­re­tar­iat and the as­ses­sors who will be part of a five-mem­ber team.

The se­nior FIU of­fi­cial noted

that dur­ing the pre-on­site pe­riod, Guyana will have to com­plete a tech­ni­cal com­pli­ance ques­tion­naire and all the su­per­vi­sory au­thor­i­ties will have some in­put.

The agenda of the mu­tual eval­u­a­tion, she added, will in­volve per­sons from the var­i­ous sec­tors and Guyana has to agree that these are the sec­tors that the as­ses­sors will be meet­ing with, fol­low­ing which the on-site visit, which lasts seven to eight days, will take place. Dur­ing this time, the team may clear up any is­sue it might have with the in­for­ma­tion pro­vided on the tech­ni­cal com­pli­ance ques­tion­naire. “So, they get to see first-hand how you’re re­ally op­er­at­ing… You said you did 10 site vis­its to your re­spec­tive re­port­ing en­ti­ties? They want to see the ev­i­dence. They come and they look,” she said.

She added that the post-on­site stage in­volves the draft­ing of the mu­tual eval­u­a­tion report and the ex­ec­u­tive sum­mary. She said the re­view of this draft is im­por­tant be­cause from the re­view there is the de­vel­op­ment of a key is­sue doc­u­ment.

She said that once all the is­sues are sorted out, the mu­tual eval­u­a­tion report and the ex­ec­u­tive sum­mary are sub­mit­ted for adop­tion, fol­low­ing which the coun­try will en­ter into the fol­low up process. This is in­tended to en­cour­age mem­bers to im­ple­ment the FATF stan­dards and “pro­vide reg­u­lar mon­i­tor­ing and up to date in­for­ma­tion of the coun­try’s com­pli­ance with the stan­dards and to ap­ply peer pres­sure ac­count­abil­ity.”

She then spoke of the stage that Trinidad is at and how the coun­try found it­self in that predica­ment. She also out­lined what is hap­pen­ing with Ja­maica and Bar­ba­dos, which are both at the same stage as Guyana.

‘A punch in the face’

Di­rec­tor of the Bank Su­per­vi­sion De­part­ment at the BoG Ram­nar­ine Lal also spoke at the sem­i­nar and he em­pha­sised that all the key play­ers have an in­te­gral role to play. “We are only as strong as the weak­est link, so if we don’t have ev­ery­one on board there are op­por­tu­ni­ties for peo­ple to ex­ploit the weak ar­eas,” he re­marked.

Lal said that at­ten­tion should be given to the avail­able doc­u­ments, in­clud­ing an FATF doc­u­ment on prepa­ra­tions for the fourth round which was re­leased in March. He said in this round, at­ten­tion is placed on the tech­ni­cal com­pli­ance com­po­nent and ef­fec­tive­ness.

The tech­ni­cal com­pli­ance as­sess­ment, he said, ad­dresses spe­cific re­quire­ments with re­gards to the le­gal and reg­u­la­tory frame­work. For ex­am­ple, he said while a coun­try may have the laws in place, crit­i­cal bod­ies such as the FIU may not be in place.

Ef­fec­tive­ness, he added, looks to see if the reg­u­la­tory frame­work and in­sti­tu­tional struc­tures have been im­ple­mented and are work­ing and achiev­ing the de­sired re­sults.

In giv­ing a pre­sen­ta­tion on the re­quire­ments for this round, he said that one of the im­me­di­ate out­comes out­lined by FAFT is what guides su­per­vi­sors. “Su­per­vi­sors ap­pro­pri­ately su­per­vise, mon­i­tor and reg­u­late fi­nan­cial in­sti­tu­tions and DNFBP [Des­ig­nated Non-Fi­nan­cial Busi­ness or Pro­fes­sions] for com­pli­ance with AML/CFT re­quire­ments com­men­su­rate with their risks,” he noted.

Lal said that it is ex­pected that good su­per­vi­sion will re­sult in an im­prove­ment in the level of com­pli­ance, which will dis­cour­age at­tempts by crim­i­nals to in­fil­trate the fi­nan­cial sec­tor. He re­called that sev­eral years ago when the BoG started su­per­vi­sion and ex­am­i­na­tion of the banks, it was “not happy” with what it found. “Some did not have a com­pli­ance of­fi­cer as the laws said… good poli­cies, good man­u­als, good sys­tems and so we made a list of all these de­fi­cien­cies and sent it to them,” he said, while adding that although the sit­u­a­tion has im­proved, there are still is­sues to be fixed. “The amount of progress we have seen over that time is en­cour­ag­ing. All have com­pli­ance of­fi­cers, some have more than one com­pli­ance of­fi­cers. Some have com­pli­ance units and de­part­ments…,” he said, be­fore adding that work has to be done on the gaps iden­ti­fied. “If you do that, peo­ple will know that you have a ro­bust AML frame­work and they will think twice about try­ing to come and… pen­e­trate the sys­tem,” he added.

The fun­da­men­tal is­sue to be con­sid­ered by a su­per­vi­sor, Lal noted, is li­cens­ing. “You might call it reg­u­la­tion of the re­port­ing en­tity… you may not give them a li­cence but they will have to reg­is­ter with you. We [the su­per­vi­sor] have to en­sure that the li­cens­ing and the ar­range­ments we have pre­vent crim­i­nals and money laun­der­ers and those types of peo­ple from man­ag­ing our in­sti­tu­tions,” he said, while point­ing out that this is the first and most im­por­tant pre­ven­ta­tive step.

While ex­plain­ing what su­per­vi­sion en­tails, he said that in ad­dress­ing non-com­pli­ance, the sanc­tions im­posed may have to be greater to en­sure that there is ef­fec­tive­ness. “For a lit­tle thing, you slap them on the wrist but… maybe they need a punch in the face. So you may have to es­ca­late the type of sanc­tion to get the de­sired re­sults,” he added.

(De­part­ment of Pub­lic In­for­ma­tion photo)

Some of the par­tic­i­pants at the sem­i­nar.

Basil Williams

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