Financial Crime World

Guyana’s Financial Laws to Be Overhauled Amid US Sanctions

Background

In response to recent sanctions imposed on three local businessmen and a government official accused of tax evasion and corruption, President Irfaan Ali has announced plans to amend Guyana’s financial laws. The aim is to modernize the country’s banking sector by adopting international standards, rules, and regulations.

Key Proposals

  • Allow foreign financial institutions to establish representative offices in Guyana with prior approval from the central bank.
    • These offices will not be permitted to engage in banking or financial business but can offer services that stimulate foreign direct investment by connecting capital investment opportunities.
  • Introduce regulatory oversight to ensure accountability in setting fees and charges for services offered by licensed financial institutions.
    • This move is aimed at keeping the market fair and promoting financial inclusion.
  • Remove the requirement for banks to consult with the Minister of Finance before making regulations defining financial business activities, further empowering the bank to operate independently.
  • Eliminate the need for ministerial consultation prior to issuing or refusing licenses under the Act.

Enhancements

  • Facilitate more effective consolidated supervision and cooperation among supervisory authorities, allowing for the inspection of subsidiaries and representative offices in Guyana.
  • Increase administrative penalties to encourage full compliance by financial institutions with statutory requirements and directives from supervisory authorities.

Strengthened Mechanisms

  • Create a transfer and vesting mechanism for banking and financial business between licensed financial institutions, subject to approval and a certificate from the governor of the Bank of Guyana.
  • Strengthen legal protection for the governor, officers, and employees of the Central Bank to ensure the lawful execution of their functions.

Impact

The proposed legislation is expected to elevate Guyana’s banking sector to the top tier in the region, surpassing other jurisdictions. The amendments will also promote financial inclusion, increase transparency, and enhance regulatory oversight.

Next Steps

The proposed legislation is expected to be presented to Parliament soon.