Financial Crime World

Guyana’s AML/CFT Legislation Impasse: International Implications and Consequences

The Caribbean Community (CARICOM) expressed concern last month over Guyana’s delay in passing the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act. The following are some implications of this legislation impasse and reasons for resistance.

Implications of the AML/CFT Legislation

Earl Jarrett, General Manager of Jamaica National Building Society, stresses the importance of passing the AML/CFT legislation in the fight against money laundering and terrorism financing. The effects of non-compliance could be severe:

  • Guyana could be locked out of the global financial network and unable to perform international financial transactions.
  • Disruption of the vital lifeline for citizens: Guyana has the third-largest inflow of remittances in the Caribbean.

Political Complexities and International Rules

Ronald Sanders, senior fellow at London University and former CFATF chairman, explains that Guyana’s internal politics complicate the situation. The ruling party’s inability to implement legislation not supported by opposition parties hinders the implementation of the standard legislation throughout the Caribbean and adherence to international rules supervised by the International Monetary Fund. The consequences could be detrimental:

  • Global blacklisting
  • Expensive scrutiny for correspondent banks worldwide
  • Harm to the economy as a whole

AML/CFT Deficiencies and Potential Sanctions

Ignacio M. Alvarez, of counsel at Diaz, Reus & Targ, notes that the CFATF’s firm stance against Guyana stems from its historically weak criminal justice system and propensity for crimes like drug trafficking and human trafficking. The CFATF and Guyana have established an action plan with target dates to address AML/CFT deficiencies. However, political disputes between parties have led to delays in passing the amended bill in parliament:

  • Potential sanctions
  • Negative impact on Guyana’s financial services industry

Political Debate and Airing of Grievances

Jan Smith, director for Latin America at Edgar, Dunn and Co., emphasizes that the politically-charged debate over the AML/CFT bill has created an atmosphere for airing political grievances. The opposition’s demands, such as creating the Public Procurement Commission, are viewed as a bargaining chip and a deflection of responsibility for the impasse and initial blacklisting. Despite the potential legal enterprise costs and disruption of trade and financial flows in the region, Smith maintains this is an internal political issue for Guyana.

Subheadings

  • The importance of passing the AML/CFT legislation
  • Consequences for Guyana and its economy
  • Political complexities and international rules
  • CFATF action plan and target dates
  • Political debate and airing of grievances

Bullet Points

  • Caribbean Community concerned over Guyana’s delay in passing AML/CFT Act
  • CFATF has already blacklisted Guyana for this issue
  • OAS Secretary General urges Guyana to act
  • Earl Jarrett emphasizes the importance of passing the law
  • Consequences for Guyana could be severe
    • Locked out of the global financial network
    • Disruption of vital lifeline for citizens (remittances)
  • IMF international rules require compliance
  • Political complexities complicate the situation
  • opposition parties not supporting the legislation
  • Consequences for non-compliance
    • Global blacklisting
    • Expensive scrutiny for correspondent banks worldwide
    • Harm to the economy as a whole
  • CFATF’s firm stance on Guyana’s deficiencies
  • CFATF and Guyana establish action plan with target dates to address AML/CFT deficiencies
  • Political disputes between parties have delayed the amended bill’s passage in parliament
  • Potential sanctions
  • Negative impact on Guyana’s financial services industry
  • Politically-charged debate over the AML/CFT bill
  • Opposition’s demands used as a bargaining chip
  • Consequences for legal enterprises and trade/financial flows in the region
  • regional failure or internal political issue for Guyana

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