Caribbean & Central America - December 2013 (ISSN 1741-4458)

The Caribbean Financial Action Task Force (CFATF) has blacklisted Guyana. Guyana’s attorney general and minister of legal affairs, Anil Nandlall, released a statement saying that CFATF had identified Guyana as a jurisdiction with strategic AML/CFT [Anti Money Laundering and Countering of the Financing of Terrorism] deficiencies and that it had “not made sufficient progress in addressing the deficiencies [and had] not complied with its Action Plan developed with CFATF to address these deficiencies”.

For CFATF, the key point is that Guyana has failed to implement legislative reforms that are deemed to be essential to countering the financing of terrorism and addressing the issue of money laundering. And it accompanied its declaration of Guyana’s blacklisting with a notice that other member states “are…called upon to consider implementing counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana”.

The problem is politics compounded by race.  Racially, Guyana’s most-important divide is between those of African descent (30% of the population) and those of East Indian origin (44%).  The balance is made up by mixed-race people (17%) and Amerindians (9%).  This racial divide produced a divided political outcome in the November 2011 general election in which the Indian-backed People’s Progressive Party/Civic (PPP/C) won the presidency – and with it the government of the country – while the two opposition parties ended up controlling 33 seats in parliament against the PPP/C’s 32 (26 are held by A Partnership for National Unity – APNU – and seven by the Alliance for Change – AFC).  And the APNU/AFC opposition has refused to back the bill to implement the CFATF demands.

President Donald Ramotar has expressed his frustration with the opposition, saying: “Earlier this month, the opposition legislators withheld their support for the passage of the Anti-Money Laundering and Countering the Financing of Terrorism Bill despite having agreed six months ago for the legislation to go before a special select committee”.

The blacklisting could have a significant impact on Guyana’s economy given that its financial, banking, and insurance sector will now come under close scrutiny and this could affect the purchase of goods and services both by the government and private sector. Prime Minister Samuel Hinds has also warned that “were Guyana not to put its house in order according to CFATF recommendations by February 2014, CFATF will be unavoidably called in by the FATF ICRF [International Cooperation Review Group]”. He added, in remarks made on 21 November, that “once a country is blacklisted it takes years to be white listed” even after full compliance is met.

Caricom has added its concerns to the debate, warning about “the impact that any adverse action by the task force could have on the Guyanese economy, and by extension the Caricom region as a whole, particularly in the areas of trade and financial services”. Caricom has called for an “early resolution to the issues surrounding the implementation of recommendations to address deficiencies in Guyana's anti-money laundering regime”, which is of course just what Guyana’s government wants but is unable to implement because of the vagaries of the country’s hybrid presidential/parliamentary system.

The government’s hope is that the seriousness of the crisis provoked by the CFATF blacklisting – well emphasized by organisations like Caricom - will persuade at least some of the opposition to back the bill when it is re-presented to parliament.  According to Cabinet Secretary Roger Luncheon, the government will be exploring the possibility of reaching a consensus with at least one of the opposition parties with a “main objective” of passing the bill by February 2014.  Attorney-General Anil Nandlall has also said: “If we are able to pass this bill – if not before February, then by May 2014 – Guyana can extricate itself from this list that it finds itself on, and we can be restored to some level of normalcy.”