Editorial – February 19, 2016 :
The Montserrat Reporter has been highlighting articles on this issue relating to “Correspondent Banking” and what the Caribbean, CARICOM, the OECS to include Montserrat of course are faced with.
The problem with the seeming chaos and the resulting bad mouths over Bank of Montserrat being issued notice relating correspondent banking this week has to do with gullibility, maybe some frustration; but looking on, the frustration of politics and playing with serious issues pertaining to the people. It is the whole island that will suffer, the fact that the well to do financially may well have their finances taken care of in already secure places.
The ECCB Banking Act had some to do with this correspondents banking issue just as it was part of the push for an amalgamation of banks two years ago. Were there any plans back then when former Premier was especially interested in this matter going forward, just as he made it known that the Banking Act was important for Montserrat to get on board with it? We wouldn’t doubt that when Premier Romeo now says that this matter was on the table at the last JMC meeting, that it had been there before. But such matters were secrets then!
Following is information obtained coming out of research and discussions we have on the issue putting flesh on the real issues we face or could face.
The correspondent banking system in Latin America and the Caribbean has recently been facing increasing pressure, so much so that institutions like the World Bank and the Financial Action Task Force (FATF) have issued consultative reports on the brewing crisis in these emerging markets.
“Belize and Antigua, among other territories are again being perceived as high-risk jurisdictions. Consequently, tier one banks like J.P. Morgan Chase, Bank Of America and Citigroup have been severing correspondent-banking relationships with whole categories of customers in the region including domestic banks, charities, diplomatic accounts, money services business (MSB) and even a few central banks “
Much of this is about squeezing the Caribbean who mostly are being above board…according to CARICOM anyway.
Small state countries should seek more long-term solutions that address the perceived jurisdictional and regulatory risk. That likely means Belize Central Bank and ECCB.
But here is a clue to the problem, coming out of New York, USA, last week end: “A new investigation from advocacy group Global Witness, shown recently on CBS’ 60 Minutes, showed the role that British overseas territories can play in facilitating the movement of suspect funds into the US.
It said, in part sounding good for Montserrat – But the innocent may suffer for the guilty, the problem of de-risking, but is all the information and accusations accurate: “Montserrat is in the process of creating a public registry of beneficial owners. Gibraltar is required by the EU anti-money laundering directive to give access to beneficial ownership to anyone who can demonstrate a legitimate interest. Company ownership in the other overseas territories is still secret. (The fact is that Montserrat has long reported its compliance with creating a public registry…)
“The UK’s Overseas Territories say that their regimes are good enough to stop corruption and tax evasion, but this shocking investigation suggests that’s far from the reality. The UK government is holding an Anti-Corruption Summit in London this year: this must address the problem in the UK’s backyard of the overseas territories, as well as the city, if the summit is to be a success and for the UK to have any credibility as a world leader in fighting corruption,” said Joseph Stead, campaigner at Christian Aid.
“If there were any schemes designed to destroy the economies of several countries without a military war, then this is such a scheme. It is erroneous; it is pernicious; and it is vicious!” That was how Antigua and Barbuda’s Prime Minister Gaston Browne described the way in which US banks, under pressure from US regulatory agencies, are cutting off correspondent relations with Caribbean indigenous and offshore banks unilaterally and with very little notice. Reports like this may have led repeats of the misinformation about Bank of Montserrat Ltd.
