Insurance applicants’ political affiliation not required – FIU

Two days after the Opposition slammed moves taken by several local insurance companies here to request from applicants their political affiliation, the Financial Intelligence Unit (FIU) has noted that this should not form part of any requirement and was a total misunderstanding.

FIU Director Matthew Langevine said the policy may be misguided based on provisions for the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) legislation for Politically Exposed Persons (PEPs). A PEP is defined by the Financial Action Task Force (FATF) as an individual who is or has been entrusted with a prominent public function and owing to their position, has some influence.
Langevine said, “It is not intended to work by these reporting entities asking you about your political affiliation.” While explaining that each insurance company is expected to use its discretion to identify PEPs, he said the move to ask everyone their political affiliation was reckless.
“Persons will give information that could be misleading. So, it is not for you (insurance companies) to go questioning every single person whether they are politically exposed or not. You are supposed to make that determination based on your knowledge of the office that that person may hold,” Langevine stated.
The FIU Head also stated that these companies should be guided Recommendation 12 from the FATF, the global body which sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats. The AML/CFT Act of 2009 has risk management systems in place to determine whether a customer is a PEP.
On that note, Langevine noted that the regulations do not apply to any customer. The FIU, he said, has already been asked by the Bank of Guyana to meet with insurance companies to discuss the issue and clarify how their due diligence should be conducted within the right framework.
Langevine said the intention was not to place additional burden on customers of different entities, including insurance companies. Instead, it should be implemented within the context of addressing the issue, understanding the nature of transactions being done by these PEPs.
The People’s Progressive Party/Civic (PPP/C) was the first to speak out on this issue when it noted that almost all insurance companies have included on their application forms a query about political affiliation. The Party has since urged Government to take action to reverse what it described as a “retrograde move”.
The PPP/C said that Article 149 (2) specifically protects all Guyanese citizens from discrimination on many grounds, including “political opinion, conscience and belief”. Article 147 also guarantees citizens’ right to freedom of association, the right to belong and form political parties.
“Therefore, any request for one’s political affiliation would be in violation of these Articles of the Constitution. In addition, S18 of the 1998 Prevention of Discrimination Act, which specifically addresses ‘Application forms, etc’, states that it is unlawful for a person to request or require any other person to provide information relative to their political opinions.”
As such, the PPP/C has urged Government, the insurance companies in question, and related entities, to disclose if this was a new policy, under what statute has it been implemented, and why there has been no public announcement of this new requirement.
Attorney and political analyst Christopher Ram has also described the move as unconstitutional. While not commenting specifically on the Opposition’s arguments, Ram said that it was absurd that any insurance company or banking institution should be given that authority.
“The thing about Politically Exposed Persons is a question of definition and it’s persons who hold positions in political parties and so on. A member of a political party isn’t automatically a PEP,” he said.
When asked whether there was need for a further amendment to the Act, the Attorney said that the question should be asked whether that was necessary or it was being badly applied.
Refusing a business relationship with a PEP simply based on the determination that the client is a PEP is contrary to the letter and spirit of Recommendation 12. The PPP/C contends that this definition does not refer to nor require any citizen to state their political party affiliation.