From The Belize Times

Belize’s economy which is already on life-support and barely kept alive by the slew of loans made by the Barrow Administration has received another heavy blow with the announcement that United States’ banks could soon end their correspondent banking arrangement with our local banks.

This arrangement, which has existed since the early years of Belize’s economy, has allowed a customer of a bank in one country to send money to someone in another country, even if the bank in question does not have a branch there. U.S. Banks are at the center of the global financial system and Belize’s banks are strategically linked to them.

The threat by U.S. banks to cut off Belize is believed to be a direct result of the country’s designation by the U.S. 2015 International Narcotics Control Strategy Report (INCSR) as a “Major Illicit Drug Producing, Major Drug-Transit, Major Money Laundering” state [see page 07 of April 5, 2015 edition of the BELIZE TIMES].

The United States Government, in a move to enforce rules at preventing money-laundering and starving terrorists of funds, has toughened up on big international banks in America for lapses in their controls relating to money-laundering, sanctions and the financing of terrorism. In response, the banks have imposed stricter controls and those on clients that resist end up suffering consequences.

This could lead to a very serious dilemma for Belize. The looming consequences are dire. Denying local banks access to U.S. accounts for transactions could affect credit card services or online ordering services.

More serious is the news that even the Central Bank faces the threat, which means that the Government could be blocked out of international financial transactions deriving in the United States.

Prime Minister Dean Barrow appeared puzzled or attempted to play the sympathy card by appearing perplexed at last week’s 7th Summit of the Americas held in Panama. He blamed everything and everyone but his Administration’s failure to comply with international accountability and transparency standards for what is taking place.

While addressing the dozens of leaders present, which coincidentally did not include U.S. President Barack Obama, Barrow blamed the measures on wrongheaded United States policy. He complained about the US’s annual reports and classifications and criticised that they were “designed to put our offshore sector out of business”.

He then grumbled that despite “every effort” to comply with legislative and enforcement measures imposed by the United States, Belize is still blacklisted and made to suffer “damnation by innuendo”.

Barrow cursed at the U.S. accusing them of offering “no bill of indictment listing any specific instances of violation”.

But Barrow was not telling the truth.

The U.S. 2015 International Narcotics Control Strategy Report, for example, makes specific mention of areas of concern for the United States Government. The report also warns that the U.S. Government may take steps to sanction countries who do not comply with measures.

In August 2013, the Prime Minister apparently understood very clearly what measures needed to be taken to meet standards requested by the Caribbean Financial Action Task Force (CFATF). If he was not aware, as he claims now, he wouldn’t have been able to rush through new legislation, among them poorly drafted bills, in response to the pressure and to avoid sanctions.

Barrow’s rhetoric did not impress anyone at the summit. It made no international headlines nor captured the attention, except for a puny side-note, of the U.S. delegation. While he complained bitterly about U.S. policy and the “superpower in our midst”, the day after when Obama arrived at the summit, Barrow could not help but pose as many times next to the U.S. president for photo ops.

For more on this story go to: http://www.belizetimes.bz/?p=23108