So, what is the extent of money laundering?

http://www.stabroeknews.com/index.pl/article?id=56533073

So, what is the extent of money laundering?
Stabroek News Editorial. Monday, November 12th 2007


In his address to the annual awards ceremony of the Guyana
Manufacturing and Services Association (GMSA), two Saturdays ago
President Jagdeo challenged the widely held belief that a significant
part of the economy is being buttressed by laundered money. He referred
to a statement made by a member of the private sector that 80% of the
economy was based on drug money.

"I don't have a problem with anyone making that assertion", the
President said, adding however that when the annual US State Department
Report on the narcotics trade and laundering had been published he had
called the US embassy and asked how the figure contained in that report
had been estimated but was still to receive the methodology.

"The wild assertions are not enough", the President thundered adding
that in 2006 there was an inflow of US$1.02B inclusive of remittances
and "I don't have here a line called drug money".

We agree that wild assertions are not acceptable but perhaps amid the
friendly and warm environment in which he made his declaration
President Jagdeo might have forgotten that he is yet to tell the
country what he knows of the extent of money laundering in the country.
Is it 80% of the economy? The President says no. Is it 60%, 50%, 10%?
Or doesn't he know or want to know?

And that is the crux of the matter. As long as the President and his
government continue to deny that there is a money laundering problem it
will always be the elephant in the room and any number of persons will
essay attempts at determining its size and characteristics.

In countries like Guyana which have unwittingly and unwillingly become
intermediaries in the supply of cocaine, the onus is on the state to
determine the extent of the problem and to craft solutions. It is not
the role of the US State Department or the US embassy or the
businessman at the private gathering.

This is where the President's attempt to denounce the money laundering
argument amounts to mere bluster and rhetoric. His governments - he has
now been President for nine years - have abjectly failed to install the
legislative and enforcement machinery needed to effectively crack down
on the drug trade. The result has been that conditions enabling the
drug trade and money laundering have thrived. The numerous edifices
that have sprung up around the retail, sport and other sectors beg the
question of how the size of their investments could be matched with the
low growth economy and generally depressed business.

Two years after he became President, the Money Laundering Act was
passed in 2000. Five years after the passage of that Act, the
government was still promising the full operationalisation of the
Financial Intelligence Unit (FIU) provided for under the Act and
pledging to implement the necessary regulations, staff the unit with
the required experts and make it an autonomous agency.

2007 is now drawing to a close and the government is still to live up
to its promise to replace the still-born 2000 Act with a new one which
caters for asset seizure and forfeiture. Can this government really be
serious about finding out about the extent of money laundering and
acting against it?

There has not been a single prosecution under the 2000 Act and the FIU
has never been heard from or the fruit of its labours presented to the
public. And there is no doubt that the drug trade has flourished and
that the fight against it is being waged at US and other foreign ports
and in courtrooms in the US and further afield, but not in Georgetown.
The evidence is there in the cargoes of cocaine that have been seized
abroad after being shipped from Guyana in a variety of now famous
containers: timber, rice, coconuts, molasses, fish, etc. The evidence
is also there in the courtroom deliberations and revelations mainly in
New York.

It was only on Thursday that the Acting Crime Chief made bold to say
that the police believed that indicted businessman Roger Khan had been
involved in drug trafficking. Over that period of time did the
government and its FIU ever try to determine whether Mr Khan's business
operations here had legitimate underpinnings? Or gather evidence
against him while he allegedly assisted in the crime fight? Did it do
this for any of the other business persons held in connection with
drugs? Thus far, the government's fight against drugs has been a sham.

There is also another serious consequence of this dereliction of duty
and insouciance. The last 10 years or so have been littered with
inexplicable killings and other bloody violence more than likely the
result of narco-terrorism. The unwillingness to act against the drug
trade may have brought ephemeral benefits in the form of money pumped
into the economy, but it has also exacted much violence, bloodshed and
death.

The public awaits the swift activation and enlivening of the new money
laundering legislation.