Tightening anti-money laundering laws

Under increasing pressure from international organisations, the government has opened two draft bills for consultation on tightening antimoney laundering laws. In the context of the oil boom and the vast amounts of money swilling around here and entering the country it makes eminent sense although whether enforcement will be taken seriously is left to be seen.

What is clear is that the international antimoney laundering architecture has discerned the growing risks that will emanate from this rapidly expanding economy and wants Guyana to take this seriously. Given the outlook of this government it is also crucial that no part of the proposed legislative changes can be used to stifle and undermine non-governmental organisations.

Attorney General Anil Nandlall SC acknowledged that the laws have to be in place to implement the outstanding recommendations of the Caribbean Financial Action Task Force (CFATF) and the Financial Action Task Force. He also noted that the country’s anti-money-laundering framework will be undergoing its fourth round of mutual evaluation in September 2023 by the CFATF and the tabling of the bills should be seen in this light.

According to the Explanatory Memorandum, the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill 2023 seeks to update the Act to ensure the Financial Intelligence Unit (FIU) meets the necessary requirements for membership of the Egmont Group. The Egmont Group comprises FIUs and Guyana needs to join this to be part of a network that shares information on money laundering. Membership has been spoken about for many years.

Sections 46 and 55 of the amendment bill provide a greater period of time to go after the property of criminals for confiscation for forfeiture, amending the period in question from six years to twenty years. This is quite significant but again is the agency that will be going after these assets up to the task and will it execute its functions without fear or favour?

The amendment that will immediately test the intent of the authorities once the bill is passed and the law enacted is Section 66. This section is to be substituted as it previously precluded assets gained before the passage of the Act from confiscation. The new provision would now provide the opportunity for the relevant authorities to go after any assets suspected to be tainted property, or having been assessed as proceeds of crime. So, for example, the assets of convicted drug lord, Roger Khan, who the then PPP/C government had broad knowledge of would immediately pop up on the radar as would assets of other wellknown figures convicted during that period.

Again, the question will arise, which agency will discharge these functions and how? A major hotel in the city has come under suspicion in recent years of a commingling of its finances with drug trafficking. Nothing has happened.

Currency has also been updated to include virtual, digital and crypto assets and currencies.

Serious offences would also be updated to involve unlawful conduct, thus also providing an all-crimes approach to the listed approach which is currently available in the Schedule.

Section 29 provides that, in addition to magistrates, search warrants may also now be granted by a Justice of the Peace in order to enable hot pursuit and hot tip situations, to allow swift action and prevent a person from quickly disposing of their assets or instruments of the crime.

Section 37 says that applications for seizure may now be made before either a High Court Judge or a magistrate. Section 37A and 37B are also included to ensure that the cash seizure regime is made more efficient. The period for detention of cash for investigative purposes will also be increased from 72 hours to 7 days.

Section 39 at new subsections (6) to (8) ensures that not only can the Court make whatever necessary orders to make restraint orders effective, but it also enables a law enforcement officer to seize the property for the purpose of preventing any property being removed from Guyana or concealed or destroyed domestically.

This Bill provides a new section 109A, which recognizes the Special Organised Crime Unit (SOCU) as the primary body within the Guyana Police Force addressing matters relating to money laundering, terrorist financing and proliferation financing.

The rest of the amendment bill is straightforward. The companion bill, the Guyana Compliance Commission Bill is mostly unremarkable except that it could clearly be used to target non governmental organisations (NGOs).

It is intended to be an Act to provide (a) adequate supervision to reporting entities (Designated NonFinancial Business or Professions and Non-Bank Financial Institutions) for compliance with obligations under the Anti-Money Laundering and Countering the Financing of Terrorism Act Cap 10:11.

(b) enhance the compliance, guidance and training regime on money laundering, terrorism financing and proliferation financing in Guyana.

There is nothing unusual there but the melding of NGOs into this anti-laundering framework will tempt this government to abuse its provisions and strike at critics as was evident in its recent extensive and continuing attack on the Guyana Human Rights Association and other groups such as Transparency Institute Guyana Inc and the Amerindian Peoples Association.

Among its duties, the Compliance Commission shall from time to time conduct a risk assessment of the non-profit organisation sector in Guyana.

Upon registration of a non-profit organisation under the Friendly Societies Act, Companies Act or the registration of a Deed, the respective Registrar shall refer the non-profit organisation to the Commission for registration.

A person shall not operate a non-profit organisation in Guyana unless the non-profit organisation is registered under this Act.

A person who contravenes Guideline 6 commits an offence and is liable to a penalty as prescribed in section 23 (2) of the Anti-money Laundering/Countering the Financing of Terrorism Act.

An application for registration as a non-profit organisation under Guideline 6 shall include the following:

(a) a form containing—

(i) the name, address, telephone number and e-mail address of the non-profit organisation;

(ii) the declared purposes and activities of the nonprofit organisation; and

(iii) the name, occupation, address, telephone number and e-mail address of each person who is a controller of the non-profit organisation;

(b) copies of the constituent documents of the nonprofit organisation;

(c) a copy of photo identification of the controller or controllers making the application of the non-profit organisation in the form of a valid national identification card or passport;

(d) a completed AML/CFT/CPF risk assessment questionnaire;

(e) a fee prescribed by Rules; and

(f) such other information as may be prescribed by Rules.

The Commission shall conduct a risk profiling process of the entity to determine the nature of activities based on definition outlined in section 2 of the Act and the size of the non-profit organisation.

Once the Commission is satisfied that the non-profit organisation reaches the criteria for regulation, the Commission shall refer the non-profit organisation (targeted non-profit organisation) to the Financial Intelligence Unit for registration for Terrorist Financing reporting purposes.

The Financial Intelligence Unit, following registration of the non-profit organisation shall provide an onboarding training and introduce Suspicious Transaction, Terrorist Financing and Proliferation Financing reporting obligations to the NPO.

The Commission shall seek to ensure that non-profit organisations (who are identified as being a greater terrorist financing risk) implement the following specific measures:

a) maintain information on their activities and those who own, control or direct their activities;

b) provide annual financial statements of their activities;

c) have controls in place to ensure that funds are fully accounted for and spent in a manner consistent with the non-profit organisation’s stated activities;

d) follow a “know your beneficiaries and associate non-profit organisations ” rule; e) keep records; and f) be subject to monitoring by the appropriate authorities, including the application of effective, proportionate and dissuasive sanctions for violating these requirements.

That is only a portion of the oversight envisaged. It can clearly be abused.