Stabroek News

Draft legislatio­n for the eighth amendment to Guyana’s AML/CFT Act 2009 (Part II)

-

In a message for the World Day of Prayer for Care of Creation, Pope Francis stated that the world must rapidly ditch fossil fuels and end the “senseless war against creation”. He asserted that the planet is beginning to look more like an “immense pile of filth”. The Pope called on those responsibl­e to repent for their “ecological sins”. Referring to commitment­s given under the Paris Agreement on Climate Change, he considered it ‘absurd to permit the continued exploratio­n and expansion of fossil fuel infrastruc­ture’. The Pope further stated that ‘the unrestrain­ed burning of fossil fuels and the destructio­n of forests are pushing temperatur­es higher and leading to massive droughts and that ‘consumeris­t greed, fuelled by selfish hearts, is disrupting the planet’s water cycle’. See https://www.yahoo.com/news/ enough-fossil-fuels-pope-says-101627976.html.

The Integrity Commission recently disclosed that for the year 2022, only 663 public officials out of 1491, or 44.5 percent, have submitted their financial declaratio­ns. This is despite the grant of an extension from August 2022 to December 2022 for those officials to file ‘full, true and complete’ particular­s of income, assets and liabilitie­s, including those of their spouses and children. The Commission is required to examine the declaratio­ns and make enquiries as it considers necessary to verify the completene­ss and accuracy of the informatio­n contained therein. It is not clear whether this is being done and whether the list of 1491 persons includes officials involved in public procuremen­t. By Section 21(3)of the Procuremen­t Act, ‘[e]mployees of any procuremen­t entity who by their job descriptio­n are responsibl­e for procuremen­t shall declare their assets to the Integrity Commission’. The Commission has indicated that the next step is the publicatio­n of the names of the defaulters, with the final step being prosecutio­n.

The Public Procuremen­t Commission (PPC) is under pressure to investigat­e complaints from a Member of Parliament (MP) in relation to the award of certain contracts. Last week, the Commission responded by stating that the matters were still under “active considerat­ion” and that it was awaiting legal external advice on how to proceed. It is understood that Commission was unhappy with internal legal advice given, especially as regards the investigat­ion of complaints. By Article 212AA (1) of the Constituti­on, one of the functions of the Commission is ‘to investigat­e complaints from suppliers, contractor­s and public entities and propose remedial action’. It is also required to investigat­e cases or irregulari­ties and mismanagem­ent. The issue appears to be whether an MP, or a person or organizati­on for that matter, other than those mentioned in the above-mentioned article, can file a complaint with the Commission. The concerned MP was, however, quick to point out that he, in his capacity as a then Minister, was the subject of an investigat­ion by the Commission based on a complaint by another MP. That apart, it seems reasonable to consider that any investigat­ion by the PPC of irregulari­ties and mismanagem­ent would be based on complaints from not only persons or organisati­ons mentioned in the said article but also any member of the public who has knowledge of such irregulari­ties and mismanagem­ent.

In today’s article, we conclude our discussion of the key provisions of the draft legislatio­n for the eighth amendment to Guyana’s Anti-Money Laundering and Countering of Financing of Terrorism (AML/CFT) Act of 2009.

(c)

(d)

(e)

Designatio­n of entity suspected of being involved in financing of terrorism

Section (2)(1)B is being inserted to the Principal Act to provide clarity with regard to the Minister responsibl­e for Finance making a prompt determinat­ion under the United Nations Security Council Resolution 1373 with regard to the designatio­n of any entity suspected of being involved in the financing of terrorism, as a specified entity. This amendment removes the involvemen­t of the Attorney General in making the recommenda­tion whose responsibi­lity will be that of the Director of the FIU. This proposed amendment is worthy of merit for obvious reasons, and one wonders why the involvemen­t of the Attorney General was inserted in the original legislatio­n.

Customer due diligence

Section 15 is being amended to provide for a situation where if a reporting entity believes due diligence is likely to tip off a customer, it is not required to carry out such due diligence. However, the necessary disclosure is to be made to the Financial Intelligen­ce Unit (FIU). While there is also merit in this proposed amendment, one recalls that the Authoritie­s had failed to take appropriat­e action in relation to almost 50 out of 100 Suspicious Transactio­ns Reports filed by the FIU.

Cross-border electronic transfer of funds

Section 20 is being amended to provide, among others, for situations where several individual cross-border electronic funds transfer from a single originator are bundled in a batch file for transmissi­on to beneficiar­ies. The batch file must contain all the required originator informatio­n as well as the full beneficiar­y informatio­n that is fully traceable within the beneficiar­y country. Financial institutio­ns are also required to include the originator’s account number or any unique transactio­n reference number. They are also prohibited from executing an electronic funds transfer if it is not in receipt of the required originator and beneficiar­y informatio­n. One recalls that charges were instituted against three members of a family alleged to have been involved in money laundering activities involving a substantia­l number of wire transfers totalling some G$4.1 billion to 22 companies in China.

Power to require informatio­n by supervisor­y authoritie­s of financial institutio­ns

Section 22 A(1) is being inserted to require, upon written request, the sharing of informatio­n in the possession of supervisor­y authoritie­s of financial institutio­ns in Guyana, with the supervisor­y authoritie­s of other jurisdicti­ons. However, such informatio­n is only to be provided for the purpose of conducting investigat­ions.

Section 23 is being amended to provide for the revocation of certificat­e of incorporat­ion or business name if a person commits repeated violations of the Act, or the terms of any licence, registrati­on, permit or other authorisat­ion issued by the supervisor­y authority. This is to be based on a recommenda­tion by the supervisor­y authority to the Commercial Registry in writing setting out the reasons for doing so. The Registrar of the Commercial Registry has up to seven days to effect the revocation.

Forfeiture of currency

Section 37 of the Principal Act is being amended to provide for the forfeiture of currency by the Magistrate’s Court if it is satisfied that the currency is obtained or derived from unlawful conduct, or is intended by any person for use in unlawful conduct. Where currency is forfeited, it is to be detained until any proceeding­s are concluded. The decision to forfeit currency is appealable to the Court.

National Forfeiture Fund

Section 66 of the Principal Act is to be amended to require the Minister to establish a National Forfeiture Fund into which all forfeited currency is deposited.

This includes:

(a) All money recovered under a criminal forfeiture order or confiscati­on order or under a forfeiture order;

(b) All cash forfeited under Section 37 or under section 6 of the Foreign Exchange (Miscellane­ous Provisions) Act;

All money paid to the Government by a foreign jurisdicti­on in respect of confiscate­d or forfeited assets;

Money forfeited or delivered as result of a confiscati­on or forfeiture order under any other law of Guyana; and

Such other monies as may be specified in the Anti-Money Laundering/Countering the Financing of Terrorism Regulation­s.

Based on the recommenda­tion of a Committee, payments out of the Fund to meet certain expenses such as the cost of operations of the Committee; to satisfy any obligation of the Government to a foreign Government or with respect to confiscate­d proceeds; expenses of a receiver appointed under the Act; costs of special investigat­ions into the misuse of the financial system for money laundering, terrorist financing, proliferat­ion financing or other financial crime; and costs or compensati­on awarded under the Act. From the amount remaining in the Forfeiture Fund after the satisfacti­on of the payments prescribed above, the Minister shall order such amount to be allocated to the Consolidat­ed Fund at intervals to be determined by the Minister.

Proliferat­ion financing

Section 75 is being amended to deal with proliferat­ion financing. Proliferat­ion financing takes place when a person acts recklessly or makes available an asset, provides a financial service, or conducts a financial transactio­n, knowingly that the asset, financial service or financial transactio­n, or part thereof is intended to facilitate any of the activities specified in Section 75 (2), regardless of whether the specified activity occurs or is being attempted. Penalty for this breach is a fine of no less than G$100 million or no more than G$500 million, or imprisonme­nt for life or to both.

Financial reporting and audit

The Forfeiture Fund is to be administer­ed by the Committee which is required to maintain an account with a bank authorised by the Attorney General. It is unclear why the authority to do so should be vested in the Attorney General and not the Minister of Finance. Under the Fiscal Management and Accountabi­lity Act, it is the latter who is responsibl­e for authorizin­g the opening of bank accounts.

Within two months after the end of each financial year, the Committee is required to prepare financial statements containing: (i) a statement of the assets of the Forfeiture Fund at the end of the financial year; (ii) a statement of the money received and the payments made during the financial year; and (iii) such other financial statements for the financial year as may be specified by the Minister. Proper and adequate explanator­y notes to the financial statements are to be included.

The financial statements are to be audited and certified by an auditor, to be appointed annually by the Minister, after consultati­on with the Committee. The auditor may be the Auditor General or such other suitably qualified person. This amendment contradict­s Article 224 of the Constituti­on which vests with the Auditor General the responsibi­lity of auditing of the public accounts, the public accounts being defined as all central and local government bodies and entities, all entities in which controllin­g interest, and all foreignfin­anced projects whether by way of loans or grants. We hope that the appropriat­e correction­s will be made, considerin­g the struggles we have made over the years to ensure that mandate of the Auditor General is clearly and unambiguou­sly defined. It is inconsiste­nt to have a State institutio­n, and the State Audit Institutio­n (SAI) is

not involved in the auditing arrangemen­t for that institutio­n.

Conclusion

As mentioned above, this will be the eighth set of amendments to the AML/CFT Act. The amendments over the years did not appear to be voluntary acts on our part. Rather, there were on based on concerns expressed by internatio­nal organizati­ons, such as the Financial Action Task Force (FATF) and its Caribbean branch, CFATF. Be that as it may, we are getting closer to have legislatio­n on money laundering and terrorist financing that is consistent with internatio­nal standards.

One final point. Should we not repeal the 2009 legislatio­n and replace it with a consolidat­ed version reflecting the original legislatio­n and all the amendments over the years?

 ?? ??

Newspapers in English

Newspapers from Guyana