By: Kimberly Ramkhalawan
April 22, 2022
Topic focus as US Congress delegation visits Barbados
TT Prime Minister Dr. Keith Rowley sounded a call for equitable treatment of the region’s banking institutions and to halt the discrimination it often faces when it comes to foreign transactions.
The TT PM made the bold comments even as he sat before a US Congressional delegation visiting Bridgetown, Barbados for a roundtable discussion on de-risking and correspondence banking along with other regional heads on Wednesday.
In his opening remarks, Rowley said “What has brought us here today is the effort of those of us in these islands to demand our space and the acknowledgement of our existence in the Americas. We are neighbours to the richest most powerful economies of the world and we are in fact making not a request but a demand that we be allowed to participate and to benefit from that accidental geography”.
Dr. Rowley says this often lumping together of regional banks as scrupulous institutions involved in offshore banking that encourages money laundering must come to an end, as for too long it has hampered the growth of the Caribbean economies, especially attempts to do business in the other parts of the world including with some of the world’s largest economies.
Trinidad and Tobago Prime Minister Dr.Keith Rowley likened the meeting to a family gathering where “it should remain the family position that we remain innocent until proven guilty, and therefore should not be listed for any wrongdoing that we have not participated in.”
He added that TT banks were not involved in offshore banking as its economy was predominantly oil and gas based, but because of concerns of offshore banking in other islands in the region, its banks have often been labeled as ‘guilty and dangerous’, and that there is a notion of likely risks in doing business with its local banks, something Rowley says he finds unacceptable.
Rowley added “we believe that there is great progress to be made from doing business with us. And the facts would support that, not the fiction. Not the discrimination, not the disrespect. Caribbean banks can be and must become an integral part of the American banking system and, by extension, the global banking system. The opposite is what is likely to happen if this meeting and these contacts do not bring about a change in course”.
Dr.Rowley questioned the motives behind laws that seem to target certain countries only, and pointed to the role the Ukraine/Russia War had in revealing several white collar crimes such as money laundering via banks in England, citing what he called “observing the epiphany in London and elsewhere that these people, kleptocrats (Russian oligarchs), and they have been hiding their monies in Mayfair.And it leads us to ask, had the Ukrainians not been bearing the brunt of this attack, what would have been happening to the money laundering and the encouragement?” .
The T&T Prime Minister painted the picture of the impact the disproportionate action would have on regional economies, where he questioned “if we cannot grow bananas, we can’t produce sugar, we can’t sell clothing, we can’t sell fish and we can’t bank, what kind of economy do you think would exist in the islands of the Caribbean? And if there are no sustainable economies, what is to become of these millions of people on these islands, and isn’t that a security threat to the United States itself?”
His comments were mirrored by Barbados Prime Minister Mia Amor Mottley who had spoken earlier on the unfair legislation Caribbean Islands are forced to enact as a result of US Financial policy. Apart from being unfair, she said while the Caribbean did not have the capacity to distort global systems it was asked to carry the same level of legislation as large countries are required to do that have the capacity to make the change and therefore called for regulation to be appropriate to risk. Mottley added that even “when these things were done there is a flawed and discriminatory outcome that is a result of a process that is not based on actually finding money laundering or identifying critical elements that money launderers require like loose beneficial ownership rules in the United Kingdom and the states in the US where you are not required to disclose the beneficiary but yet we are having to restructure our laws and processes to ensure all beneficial ownership is disclosed to everyone”.
She said big countries could spend big money to tick big boxes. Mottley says Barbados has appeared on these lists even though it has exchange controls in place to monitor the movement of capital in and out of its country. She called for the legislation to focus on the crime itself and not the notion, which has been off putting to potential business partners. Explaining how this happens, Mottley highlighted “the increased costs of flagging transactions in these jurisdictions among the banks, the penalties of due diligence could be too large for their profitability, leading to small Caribbean states often hearing , you are just too small to be taking on that much due diligence”
Chiming in was Chair of the CARICOM Commission on the Economy Professor Avinash Persaud, who described “these lists are a ‘mock sport’” and cited them as creating a bigger problem where small nations were spending a large sum of their GDP in trying to avoid being listed.
He then called for the standard to be lifted where international lists cannot sanction countries merely on the basis of subjective, arbitrary processes, but be backed up with evidence of money laundering.” Persaud said “countries are being listed in an arbitrary way and they are listed when they have very limited actual international, financial impact, or where the money laundering is…and the money launderers like it so. This process is increasing money laundering, it is telling the money launderers where to go. It’s telling them don’t go in these small states and the problem is that our financial inclusiveness is now going backward for the first time”.
The high level event was also co-hosted by US Congresswoman Maxine Waters, the chairwoman of the US House Committee on Financial Services, and Barbados Prime Minister Mottley.
US Congresswoman, Maxine Waters replied that she has made much progress in raising the issues in Washington, inclusive of leading the passage of legislation that is moving the US government to a tangible solutions in the anti-money laundering Act of 2020 which mandates a US Government wide strategy to combat financial de-risking due later this year , the department of the Treasury led strategy will require a United States Agency to detail the steps that they will take to address this concern. And it will describe how congress can support that effort but this complex issue of de-risking cannot be solved by the US congress alone.
Waters said she hoped to reverse the damage caused by decades of de-risking and deteriorating financial access, and the framework advances in such a way, that whatever is cultivated in the Caribbean can become the model for other regions around the world, facing similar obstacles to financial access.
The TT Prime Minister, Dr.Keith Rowley says since the meeting, he too has been invited to attend further discussions on the matter in DC, later this month.