Finance and Public Service Minister Dr Nigel Clarke leaves for Washington this weekend to among other things attempt to do what his predecessor, Audley Shaw was unable to do, which is to get the American banking community to relax their de-risking concerns on Jamaica.
Dr Clarke will be attending the Annual Meetings of the Boards of Governors of the World Bank Group (WBG) and the International Monetary Fund (IMF) from October 14-20 at which time he will be lobbying the conglomerate American banks to review their restrictions on offering correspondent banking relations with Jamaica, as it regards the repatriation and management of US hard currency on behalf of local banks.
In the past few years Jamaican and other Caribbean banks have found themselves in a conundrum whereby American conglomerate banks have been restricting their correspondent banking relations with them, as it regards the holding and management of hard American cash on their behalf, fearing de-risking concerns.
De-risking refers to the phenomenon of financial institutions terminating or restricting business relationships due to a combination of cost/benefit considerations and concerns about Anti-Money Laundering (AML)/ Counter-Financing of Terrorism (CFT) risks.
JAMAICA AND CARICOM BOTH TO RAISE ISSUE
The correspondent banks are particularly concerned about the amount of hard currency that is coming out of Jamaica and the Caribbean citing AML/CFT concerns.
Speaking with the Caribbean Business Report at a recent press conference at his ministry, Dr Clarke explained that “at every annual meeting of the IMF and the World Bank Jamaica joins with its Caricom colleagues in raising the issue of correspondent banking relationships to the big powers in the world and I’ll be doing so again when I go to the IMF/World Bank annual meetings.”
He emphasised that de-risking concerns are a reality which all banks face noting that “these kinds of realities are not realities Jamaica can solve on its own nor can it solve on its own alone. Correspondent baking is very important to Jamaica’s future and we intend to pursue policies that keep those relationships open even while we advance the causes of new industries such as medical cannabis.”
JAMAICA TO COMPLY WITH AML/CFT GLOBAL STANDARDS BY YEAR END
Among the policies being pursued to keep those relations open are enacting laws, which deals with AML/CFT matters. Jamaica has already signalled its commitment to meeting key AML/CFT Global Standards by the end of this calendar year.
These include amendments to the Proceeds of Crime Act and regulations to provide for simplified, risk-based due diligence measures and measures for dealing with high-risk countries and amendments to the Terrorist Prevention Act and Regulations.
The amendments to the Terrorism Prevention Act and regulations deals with targeted financial sanctions (ie freezing of assets), foreign terrorist fighters, and procedures for complying and implementing certain United Naations Security Council designations.
In addition, the United Nations Security Council Resolution (Implementation) Act is being amended to flesh out the reporting and compliance obligations under that Act and to bring Jamaica’s laws in compliance with our international treaty obligations.