Now that the dust has settled over the claim by at least one insurance company that the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Amendment Act of 2015 authorized them to ask on their “Customer Verification Form- Individual” that applicants should “indicate any affiliation with Government/Military/state officials (including political party)”, it may be opportune to review the controversy, since, in our estimation, it has very severe implications for fundamental rights of Guyanese citizens.
We should note that the Financial Investigation Unit (FIU) Director Matthew Langevine, in charge of overseeing the Act, later said the policy was “misguided”. In reference of the provisions of the AML/CFT legislation for Politically Exposed Persons (PEPs) he said, “It is not intended to work by these reporting entities asking you about your political affiliation.” But while he pronounced that asking applicants for their “political affiliation” was “reckless”, he admitted that each insurance company was expected to use its “discretion” to identify PEPs.
And herein lies the danger, since the financial institutions are operating in a new environment, largely defined by the Government.
Recommendation 12 of the global Financial Action Task Force (FATF), incorporated into the 2015 AML/CFT Amendment Act and regulations with regard to “Politically Exposed Persons (PEPs)” states the following: “A politically exposed person (PEP) is defined by the Financial Action Task Force (FATF) as an individual who is or has been entrusted with a prominent public function.” However, this is a very broad definition, and because of the context in which the legislation has been deployed, it is not surprising that the insurance company adopted a very stringent political test.
Contextually, the AML/CTF was highly publicized by the present Government. When they finally passed legislation soon after taking office in 2015, (after rejecting the PPP’s version in 2012 and 2014), they used it as a weapon to go after the members of the PPP, whom they insisted had engaged in financial skullduggery that violated the legislation. Nothing makes this clearer that the utilization of the Special Organised Crime Unit (SOCU), which was established by the PPP/C Administration as the investigative arm of the FIU, now focusing almost totally on supposed infractions by the PPP. Against this background, there arises the larger issue of what is called the “chilling effect” that this legislation can have on several fundamental rights of citizens.
According to Wiki, “A chilling effect may be caused…any legal action that would cause people to hesitate to exercise a legitimate right (freedom of speech or otherwise) for fear of legal repercussions.”
In the context of the action by the insurance company, the freedom to belong to any political party, guaranteed by the Freedom of Association via Art 147, is definitely threatened. Art 147. Sec (1) states rather explicitly: “Except with his or her own consent, no person shall be hindered in the enjoyment of his or her freedom… of… association…that is to say…his or her right to…associate with other persons, and in particular to form or belong to political parties…” The Article goes on to emphasis, in Sec (4) “Nothing contained in or done under the authority of any law shall be held to be inconsistent with, or in contravention of, this article to the extent that the law in question makes provision – (a) that is reasonably required in the interest of defence, public safety, public order, public morality or public health.”
But in buttressing the chilling effect due to the discretionary power of financial institutions to query political affiliations and the cue by SOCU’s actions, by making the Financial Intelligence Unit (FIU) subject and responsible to the AML/CFT Authority, there is the existential possibility of it being compromised and undermined in terms of its autonomy and independence. The financial institutions would have to be sensitive to this.
More troubling is the fact that the politically exposed persons – Members of Parliament — appoint the AML/CFT Authority, the FIU Director, Deputy Director, and other important functionaries in the FIU.
The lesson for Guyana from this episode is that the threats to freedom today are multifarious.
