Closing the loopholes in systems which allow for the proliferation of corruption and acts of money laundering is a goal that is unanimously supported by countries across the world. The Financial Intelligence Unit (FIU) is the special agency that has been established to target and annihilate such acts and their criminal authors so as to protect the integrity of financial markets.
TYPES OF FIUs
According to the Egmont Group, the international body that monitors FIUs, there are four models of FIUs. These include; the judicial, law enforcement, Administrative, and hybrid. The Group explains that the Judicial Model is established within the judicial branch of government wherein “disclosures” of suspicious financial activity are received by the investigative agencies of a country from its financial sector such that the judiciary powers can be brought into play e.g. seizing funds, freezing accounts, conducting interrogations, detaining people, conducting searches, etc. As for the Law Enforcement Model, the global body said that this form implements anti-money laundering measures alongside already existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent or sometimes competing jurisdictional authority to investigate money laundering. With regard to the Administrative Model, it was explained that this is a centralized, independent, administrative authority, which receives and processes information from the financial sector and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a “buffer” between the financial and the law enforcement communities. In the case of the Hybrid Model, this type serves as a disclosure intermediary and a link to both judicial and law enforcement authorities. It combines elements of at least two of the FIU models.
THE GUYANA CASE
In Guyana, the Financial Intelligence Unit is established under the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT) of 2009 as an agency responsible for requesting, receiving, analyzing and disseminating suspicious transaction reports and other information relating to money laundering, terrorist financing or proceeds of crime. According to the FIU, it is established by the Minister responsible for Finance. The FIU Act authorizes the FIU to request and receive information from any reporting entity, any supervisory agency and any law enforcement agency, any other competent authority in Guyana or elsewhere for purposes of this Act. Additionally, it overrides secrecy laws and protects reporting entities by ensuring that no civil or criminal liability action can be brought nor can any professional sanction be taken against any person or agent of any reporting entity for breach of any restriction on disclosure who in good faith, transmits information or submits reports to the Financial Intelligence Unit. The FIU said that it works in close partnership with The Financial Intelligence Unit and Guyana similar type national and international intelligence and law enforcement agencies to ensure that the country has a comprehensive anti-money laundering system
that identifies and effectively addresses suspected illegal activity. The Unit said that licensed financial institutions and a wide cross section of designated business and professional entities are obligated to report suspicious transactions to the FIU. Some of these entities which are required to submit reports include; Betting shops, Pawnbrokers, Insurance businesses, Portfolio management and advice companies, Cambios, Safe custody services, Casinos, safekeeping and administration of securities, Credit unions, exporters and importers of valuable items etc.
In proving just a sample of the kind of work it monitors, the FIU revealed that one of its analyses examines the trend of foreign currency cash movements within Guyana. The Unit said that information over a three year period (2011 – 2013) derived from declarations at ports of entry and exit and from foreign currency dealers have been analyzed. It said that the use of foreign currency cash within the country’s economy has been a feature for decades for both commercial and non-commercial purposes, especially for most businesses involved in the trade of goods and services on the international market. It also stated that the most traded foreign currency is the United States (US) dollar and trades are seldom done in Euros, Pounds Sterling and Caribbean Currencies. Well noted was that the Canadian dollar, Euros and Pounds Sterling were collectively trading at 25% of the US dollar, by value, and the major Caribbean currencies; the Barbados, Eastern Caribbean and Trinidad and Tobago dollars were 14%. The Unit said that it also monitored the passenger arrivals at the country’s main port of entry -the Cheddi Jagan International Airport Timehri (CJIA). In this regard, the Unit observed that arrivals have been increasing annually over the period. In 2011 passenger arrivals were 156,910, in 2012 – 235,967 and in 2013 -267,652. Although, passenger arrivals have increased annually, it suspiciously found that foreign currency cash declarations by inbound
travelers have been minimal throughout the same period. It said that in 2011, there were only 26 declarations; in 2012 a total of 16 and in 2013 there were 24. Notably, the FIU said that there were no declarations of Euros, Barbados and Eastern Caribbean currencies entering the country during the period. It made it clear that the threshold limit is $10,000 USD or its equivalent in any foreign currency before a cash declaration is required, which may be the main contributing factor to the recorded low levels of currency imports or conversely will affect the true level of cash declared at the points of exit.
In May 2013, the FIU and the Canadian High Commission of Guyana agreed on a technical assistance AML/CFT work plan. The Unit said that the technical assistance provided for financial, technical and human resources by the Government of Canada aimed at assisting in the improvement of Guyana’s overall AML/ CFT regime through capacity building in the following areas: Development of a National AMLCFT Strategic Plan for improving national coordination and effectiveness of key stakeholders and agencies.
In the last few years, the FIU said that a number of international conventions have recognized the usefulness of FIUs in modern anti-money laundering systems and have encouraged the states that are parties to these conventions to establish FIUs. It said that these are (in the order in which they were opened for signature), the Convention for the Suppression of the Financing of Terrorism (1999), the United Nations Convention Against Transnational Organized Crime (2001), and the United Nations Convention Against Corruption (2003). It noted that the first of these conventions requires the criminalization of the financing of terrorism; the second requires the criminalization of participation in organized international criminal groups, corruption, money laundering, and obstruction of justice. The third requires the criminalization of various forms of corruption, money laundering, concealment of the proceeds of crime, and obstruction of justice. The FIU asserted that one common element in the three conventions is that each one requires states that are parties to criminalize money laundering and to adopt measures to prevent it.