Financial Crime World

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Guyana’s Financial Sector Exposed to High ML Risk

A recent report by [Name of Organization] has revealed that Guyana’s financial sector is at risk of being exploited by money launderers and terrorists. The country’s medium-high overall threat and vulnerability have been rated as MEDIUM-HIGH, indicating a significant risk of money laundering.

Contributing Factors

  • Absence of a national strategic framework for countering terrorist financing
  • Minimum cooperation among key agencies responsible for analyzing, investigating, and prosecuting terrorist financing cases
  • Inadequate resources to combat terrorist financing

ML Risk Associated with Illegal Wildlife Trade

The illegal wildlife trade in Guyana has been assessed as having a medium ML risk due to:

  • Ineffective monitoring systems for domestic trading of wildlife
  • Lack of knowledge by law enforcement on conducting parallel financial investigations and confiscating assets of criminals involved in this trade

ML Threat Associated with Oil and Gas Sector

The oil and gas sector in Guyana has been rated as having a medium ML threat due to:

  • Ineffective and outdated legislation
  • Discretionary powers granted to the Minister responsible for petroleum
  • Lack of requirement for disclosure of beneficial ownership information when applying for prospecting/production licenses
  • Limited institutional expertise and experience to regulate, monitor, and supervise international oil and gas companies operating in the country

Financial Inclusion Products Vulnerability

Most financial inclusion services/products available in Guyana are offered by reporting entities regulated for AML/CFT compliance. However, some entities do not have clear transaction limits, which could render them vulnerable to ML. Additionally:

  • No definition of financial inclusion in local legislation
  • Limited public awareness related to financial inclusion products and services

Emerging Threats

The shift towards measures of financial inclusion has led to the emergence of new technologies in the financial services industry. The virtual assets sector remains unregulated in Guyana, making it a potential avenue for money laundering and terrorist financing.

Risk Assessment Findings

The overall ML risk in Guyana was assessed as MEDIUM-HIGH due to:

  • Medium-high overall threat and vulnerability
  • Estimated value of proceeds generated from predicate offenses committed in Guyana is approximately USD 2.2 billion, indicating a significant amount of illegal funds that could be laundered

Predicate Offenses that Generate Proceeds of Crime

The report highlights twenty serious offenses listed as predicate offenses under the Anti-Money Laundering and Countering the Financing of Terrorism Act. Other offenses carrying more than six months imprisonment are also predicates to ML in Guyana.

  • Smuggling, including gold smuggling
  • Tax evasion
  • Illicit trafficking in narcotic drugs and psychotropic substances
  • Fraud

Recommendations

The report recommends that Guyana:

  • Strengthen its AML/CFT regime by enhancing cooperation among law enforcement agencies
  • Increase resources to combat terrorist financing
  • Implement measures to prevent money laundering from predicate offenses
  • Establish a national strategic framework for countering terrorist financing
  • Increase public awareness on financial inclusion products and services

Conclusion

Guyana’s financial sector is at risk of being exploited by money launderers and terrorists due to its medium-high overall threat and vulnerability. The country must take immediate action to strengthen its AML/CFT regime, prevent money laundering from predicate offenses, and combat terrorist financing to mitigate this risk.