Less than a month after Guyana was blacklisted by the Caribbean Financial Action Task Force (CFATF), businesses are already feeling the squeeze. Private Sector Commission (PSC) Chairman Ronald Webster in a recent interview told Guyana Times International that the commission is doing everything in its power to ensure Guyana fulfils its February deadline to CFATF, to avoid further scrutiny. He noted that the blacklisting by CFATF is beginning to create a negative impact on the economic front for Guyana.
Webster also pointed out that if Guyana is blacklisted internationally, the impact will be far worst and there will be no returning for the country. According to the PSC chairman, local businesses are already beginning to complain about the extra paperwork that has to be done now when conducting international and even regional transactions.
However, he noted that the full backlash of these things takes time and would not be felt overnight.
Republic Bank Chief Executive Officer John Alves, in an interview with this newspaper, had said the situation has placed the banking sector at a loss, and there will be great difficulties for both incoming and outgoing foreign exchange activities with corresponding banks.
Onerous
“Guyana being blacklisted… means it would be much more onerous for foreign exchanges,” he said.
According to Alves, already there are a number of difficulties and challenges in processing transactions, and this is not good for Guyana.
“Clearly, now our tasks as bankers are going to be far more difficult and ultimately costly for customers because of the to and fro in getting matters sorted out… in the longer run, it will make the whole transfer of payments more difficult,” he added.
Dissatisfaction
Georgetown Chamber of Commerce (GCCI) President Clinton Urling had expressed dissatisfaction at the situation. He said the severity of the implications will not bode well for Guyana.
“… this would have economic consequences which could not only affect businesses, but private sector as a whole,” he stated.
CFATF had ordered Guyana to get the necessary legislation in place to be compliant with the sweeping reforms taking place regionally and internationally to fight money laundering and terrorism.
However, it was only earlier this year, in April, that the bill made its way to Parliament, where the opposition political parties voted to send it to the special select committee.
The bill was returned and the combined opposition withheld their support for the legislation for the second time, despite threats of serious sanctions.
The opposition claimed that the committee’s work was incomplete and wanted the bill to be re-sent for completion, but the government refused and when the matter was put to a vote, the combined opposition used its one-seat majority to defeat the government.
Then came the November deadline which was given to Guyana by CFATF to get its affairs in order; however, due to deadlock and lack of compromise in the National Assembly among the parties, Guyana was formally blacklisted by CFATF, who warned its members against the implications of doing business with Guyana.
With Guyana now blacklisted, transactions and payments in areas such as remittances, oil and goods and services, among other things, will likely face severe consequences.
The country, nevertheless, has a chance to change its fate when the Financial Action Task Force (FATF) holds its next plenary meeting in February 2014.
