Indeed, the field of finance is a vast and complex one; with each component governed by its own laws to ensure that order is maintained. In this series, we will explore some of Guyana’s financial laws which have been lauded by local experts as being extremely robust, powerful and effective.
THE AUDIT ACT
The manner in which Government expends tax dollars from the national purse is, on an annual basis, examined by Guyana’s Audit Office.
That body is currently headed by Auditor General, Deodat Sharma. He and his agency are governed by what is called the Audit Act of Guyana.
This law sets out the responsibilities and authority of the Auditor General; to strengthen Parliamentary oversight over the work of the Auditor General; to provide for the establishment and administration of an independent Audit Office; and to regulate such other matters connected with or incidental to the independent auditing of the finances of Guyana.
For the purpose of obtaining documents, information or other evidence relevant to any matter arising in the discharge of his functions, the Auditor General or any officer so authorized by him may, at all reasonable times and with proper identification can enter into and remain on a public entity’s premises; enter into and remain on any other premises if so authorized by a warrant issued by a court on the founds that there is reason to believe that documents or other information relating to the activities of a public entity may be held at those premises; and carry out a search for documents, examine documents, or make copies of documents.
According to the Audit Act, a person commits an offence if he or she knowingly and without lawful justification or excuse – (a) intentionally obstructs, hinders or resists the Auditor General or an officer authorized by him in the exercise of his power under this Act; (b) intentionally refuses or fails to comply with any lawful requirement of the Auditor General; (c) makes a statement or gives information to the Auditor General or an officer authorized by him knowing that the statement or information is false or misleading; (d) represents directly or indirectly that the person holds any authority under this Act when the person knowingly does not hold that authority; or (e) contravenes or violates the provisions of section 35.
Regarding requests for prosecution, if the Auditor General has reason to believe that an offence was committed, he shall request the Director of Public Prosecutions and the Commissioner of Police to take appropriate action and prosecute the offender if necessary.
As for penalties under this Act, a person who is convicted of an offence under section 38 is liable, on summary conviction, to a fine not to exceed two hundred thousand dollars and to imprisonment for a term not to exceed five years; an entity or body of persons which is convicted of such an offence is liable, on summary conviction, to a fine not to exceed one million dollars.
THE INTEGRITY COMMISSION ACT
The Integrity Commission Act was assented to on the 24th September, 1997. The Act provides for the establishment of the Integrity Commission and makes provisions for the purpose of securing the integrity of persons in public life.
These persons include senior officials such as the President, the Prime Minister, the Speaker of the National Assembly, Permanent Secretaries of various ministries etc.
The Act also provides for the appointment of a Chairman to head the Commission, not less than two and not more than four other members of the Commission, a Secretary to oversee the day to day work of the Commission and other officers for the proper performance of the Commission.
According to the Integrity Commission Act, the Commission has the power to do anything for the proper performance of its function and in discharging its function; it is not subject to the direction or control of any other person or authority. The Commission has the authority to regulate its own procedure and may make rules for that purpose.
Senior Public Officers as listed in the Act are expected to disclose their financial assets and liabilities on or before June 30, each year. When a public officer ceases to be a person in public life, he/she would be expected to disclose his/her assets and liabilities to the Commission within thirty days from the date that individual cease s to be a person in public life.
ANTI-MONEY LAUNDERING AND COUNTERING THE FINANCING OF TERRORISM ACT
For those who may not be aware, money laundering refers to conduct which constitutes an offence as described under section 3 of the AML/CFT Act 2009.
According to the Act, “A person commits the offence of money laundering if he knowingly or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of crime…”
With dirty money constantly being introduced into the financial system, the strengthening of the money laundering process is continuous.
Furthermore, there is no one single method of laundering money.
Methods can range from the purchase and resale of a luxury item (e.g. properties, cars and jewellery), to passing money through a complex international web of legitimate businesses and “shell” companies.
However, in the case of drug trafficking and other specified serious offences enforceable under the AML/CFT Act 2009, the proceeds usually take the form of cash which needs to enter the financial system.
Despite the variety of methods employed, money laundering is generally accomplished in three stages, which may comprise numerous transactions by the launderers that could alert a financial institution to criminal activity.
These stages are placement, layering and integration:-
Placement: refers to the placing of “dirty money” or unlawful cash proceeds into the financial system without arousing suspicion for example via deposits and purchases of monetary instruments such as cheques, or bank drafts.
Layering: refers to the movement of the money, often in a series of complex transactions crossing multiple jurisdictions designed to disguise the audit trail and provide the appearance of legitimacy. These transactions may include purchasing investment instruments, insurance contracts, wire transfers, money orders, travelers’ cheques and letters of credit
Integration: refers to the attempt to legitimize wealth derived from criminal activity. The illicit funds re-enter the legitimate economy by way of investments in real estate, luxury assets and business ventures, until the laundered funds are eventually disbursed back to the criminal.
Efforts to combat money laundering largely focus on those points in the process where the launderer’s activities are more susceptible to recognition and have, therefore, to a large extent concentrated on the deposit taking procedures of financial institutions, i.e., the placement stage.
As it relates to terrorism, this is the unlawful threat of action designed to compel the government or an international organization or intimidate the public or a section of the public for the purpose of advancing a political, religious or ideological belief or cause.
These actions include violence against a person, endangering a person’s life, damage to property, threats to national security or public health and safety, or serious interference with or disruption to an electronic system.
These activities are primarily motivated by ideological or religious beliefs. In contrast, financial gain is the main objective of financial crimes like money laundering.
Terrorist financing may involve amounts that are not always large, and the associated transactions may not necessarily be complex.
However, the methods used by terrorist organizations to move, collect, hide or make available funds for their activities are similar to those used by criminal organizations to launder their funds. This is especially so when the funds are derived from illegitimate sources, in which case, the terrorist organization would have similar concerns to a typical criminal organization in laundering the funds.
Where the funds are derived from legitimate sources, terrorist organizations would usually still need to employ the same laundering techniques to obscure or disguise the links between the organization and the funds.
However, with Guyana’s robust anti-money laundering laws, the financial environment is deemed to be effectively protected in this regard.
THE FISCAL MANAGEMENT AND ACCOUNTABILITY ACT
The Fiscal Management and Accountability Act (FMAA) of 2003 is one of the most powerful and most robust pieces of legislation in Guyana. It provides for the regulation of the preparation and execution of the annual budget; the receipt, control and disbursement of public moneys; the accounting for public moneys; and such other matters connected with or incidental to the transparent and efficient management of the finances of Guyana.
According to the Act, the Minister of Finance shall, not later than one hundred and eighty days prior to the commencement of each fiscal year, establish a timetable for the preparation of the annual budget proposal pertaining to the next ensuing fiscal year.
It also says that the Minister shall, not later than one hundred and eighty days prior to the commencement of each fiscal year, prepare and distribute a Budget Circular to all budget agencies. The Act also specifies how the minister is expected to account for tax dollars expended by various ministries and how monies are to be taken from the public purse in the case of an emergency.
According to the Act, an official who— (a) falsifies any account, statement, receipt or other record issued or kept for the purposes of this Act, the Regulations, the Finance Circulars or any other instrument made under this Act; (b) conspires or colludes with any other person to defraud the State or make opportunity for any person to defraud tile State; or (c) knowingly permits any other person to contravene any provision of this Act, is guilty of an indictable offence and liable on conviction to a fine of two million dollars and to imprisonment for three years.