Constructive dialogue on banking
By Sally Yearwood From Caribbean News Now
On Monday, August 29, 2016, Caribbean News Now ran an article by Kenneth Rijock, entitled “US tells Haiti it will cut off money transfers in November if no reforms undertaken”. While one could have dismissed the article because of erroneous statements and the lack of a point, by the end of the day with the piece being circulated around the region in different journals, it became clear (as with any news story) that perception could undermine reality and the article, no matter how erroneous, could contribute to negative perception.
Importantly, it would seem that the article is confusing the Obama administration with the Caribbean Financial Action Task Force (CFATF). The CFATF issued a public statement on June 8 of this year, saying: “If Haiti does not take specific steps by November 2016, then the CFATF will further consider whether to identify Haiti as not taking sufficient steps to address its AML/CFT deficiencies…” The US administration, on the other hand, has issued no such warning.
While this article has a provocative headline, it ultimately fails to contribute substance to an important discussion on the regional banking industry. Perhaps a more constructive dialogue to have would be on how the Caribbean private sector and public sector, together with stakeholder associations, are addressing this global problem individually and collectively.
The balance between compliance and access to finance is a tricky one, and it is generally thought that the Caribbean is particularly challenged when it comes to striking the balance. In smaller economies – some with mature financial services industries, some with high-volumes of remittances, all with a heavy dependence on trade – it can be costly to implement strong AML/CFT regimes when there are so many transactions per capita.
The Caribbean, including Haiti, has been working to address the range of issues, including costs, standards, compliance, and access, and has been looking at, and implementing solutions. Indeed, practical steps are being taken in Haiti by both the public and private sectors to address the deficiencies that have been flagged by the CFATF, in preparation for the next meeting in November.
What we should not be doing is feeding the beast. With the exception of people who thrive in an unregulated environment, there is nobody who wants to see any country in the Caribbean get sidelined from the formal global banking system.
The irony, of course, is that, by questioning Haiti’s banks’ capacity to deal with AML/CFT requirements, the article could plant more concern among correspondent banks about the risk they are facing when they do business with that country. Unless that is precisely the objective, the piece is misguided at best, willfully provocative at worst.
sally_yearwood.jpg
Sally Yearwood is Executive Director of Caribbean Central American Action, a non-profit organization based in Washington, DC
For more on this story go to: http://www.caribbeannewsnow.com/headline-Commentary%3A-Constructive-dialogue-on-banking-31640.html
To view the Kenneth Rijock article see below:
US tells Haiti it will cut off money transfers in November if no reforms undertaken
By Kenneth Rijock From Kwik Media
MIAMI – The Obama Administration has reportedly warned that it will end all money transfers from the US to Haiti in November, 2016, unless certain unspecified “corrective measures” are taken.
Many Haitians have, for decades, been largely supported by remittances sent by expatriates working in America to their needy families in Haiti, but that route is also used to repatriate the proceeds of narcotics crime, and apparently the United States has lost patience with the Haitian financial industry’s non-existent anti-money laundering and combating the financing of terrorism (AML/CFT) efforts.
Most North American compliance officers are ill-informed about the thriving Venezuela-to-Haiti-to USA drug trafficking route, believing Haiti to be an extremely poor country and not understanding its key role in drug smuggling and money laundering operations.
The level of corruption in Haiti is considered by many experts to be the highest in the Western Hemisphere, and the participants have a vested interest in keeping their financial structure deaf, dumb and blind regarding protection from financial crime, so unless the United States backs off, Haitians living in America could lose a large part of the resources that they depend upon to sustain their unemployed relatives at home.
