CFATF concerned with APNU’s proposed amendments to Anti – Money Laundering Bill

[www.inewsguyana.com] – Financial Advisor from the Caribbean Financial Action Task Force (CFATF), Roger Hernandez said the regional watchdog body has concerns in relation to the amendments that the A Partnership for National Unity (APNU) are proposing to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) (Amendment) Bill.

Hernandez explained that some of the amendments put forward deal with previous areas of the Act that was deemed compliant.

“The concern that we have is that the amendment put forward may make those areas that were formerly compliant, non-compliant,” the Government Information Agency (GINA) quoted him as saying.

He also noted that some of the amendments are outside of the remit of the recommendations initially made by the CFATF.

The visiting official said that serious attention has to be paid to whether the proposed amendments can be effectively implemented, as well as how they may affect the entire system. Hernandez said that the Bill in its current form as presented by the Government is compliant with the recommendations that were made in relation to Guyana meeting the international AML/CFT standards.

The APNU has proposed three major amendments to the Principal Act, which includes giving the Police the power to seize cash in excess of $2M and to arrest the person if there is cause to believe that the cash was obtained illegally.

“The CFATF policy is to maintain its independence with regards to the legislative process of anyone of its members we can make comments and suggestions when the legislation is finalised. We do not know what sort of changes occur during the legislative process; we can comment on draft bills that are submitted to us on the understanding that is not the final word of the CFATF because draft bills are subjected to change,” he said.

Guyana has to submit a report to the CFATF on its follow-up process by February 28.

This means that the Bill has to be passed, enforced and submitted along with the report by that date to the CFATF. This body then has to analyse the Bill on aspects of compliance with international standards subsequent to which a report will be made to the plenary in May.

On the basis of that report, the plenary will be able to make a decision on the way forward. It will decide whether Guyana should be subjected to further counter measures or if it should be recommended to the FATF for review by the International Co-operation Review Group (ICRG).

“That’s the reason for the Feb 28 deadline….Guyana is not the only (country) that is required to submit information on their follow up process on February 28; it’s a recommendation for all CFATF countries,” Hernandez said.

However, if the Bill does not find favour with the Opposition, and is not passed by February 28, then CFATF at the May plenary will decide to effectively nominate Guyana for the FATF/ICRG review.

The FATF is slated to meet in June 2014, when it will make a decision as to whether Guyana should be subject to a prima facie review by the ICRG.

If Guyana is to be recommended for an ICRG review, the outcome can result in it being placed on one of three levels of FATF listing.  The first tier is the most severe, it effectively requires countries to issue counter measures against countries that are on that list. At present there are only two countries which are placed in this category: North Korea and Iran.

The second tier consists of countries with significant AMLCFT deficiencies which have given no political commitment to address them or have not formulated an action plan in collaboration with the FATF to deal with the outstanding issues.

The lowest tier on the other hand, consists of countries that have issued a political commitment to implement the reforms and have also formulated an action plan in collaboration with the FATF which sets out deadlines for the implementation of those measures.

Hernandez explained that should Guyana be recommended for the prima facie review, the relevant authorities will be contacted during the course of the said review to get additional information and try to ascertain the areas of deficiencies. If during this period the country can offer a letter of commitment and reach an agreement on an action plan it will be placed on the lowest level.

Being placed on any one of the three tiers is the FATF’s way of telling the world of the AML/CFT deficiencies that exist in certain countries and informing them to take appropriate measures to deal with the risks.

This could see individual countries calling on their financial institutions to implement stricter measures. These could include: more intense requirements for the opening of accounts and other banking transactions, hindering access to financial markets, and difficulties in accessing development funding and technical assistance from international developmental agencies.

At present, adverse public statements are out on Guyana and Belize to CFATF member countries. Hernandez said that some supervisory authorities in the Caribbean have since moved to implement directives where they have advised their financial institutions to implement appropriate measures to deal with the risks coming from Guyana.

Importantly, even if the Parliament passes the Bill before February 28, Guyana will have to go through an assessment of its implementation before it can be removed from the regional blacklist. According to Hernandez, this process could take as long as 18 months to two years or even longer.