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#505563 - 06/30/15 05:43 AM FIU: Belize’s Banking Is Highly Transparent
Marty Offline
Belize's banking sector has caught up with the standards and regulations set by the US and European Union for accountability and transparency in our offshore sector. That's what the new Director of the Financial Intelligence Unit had to say at press conference rarely called by the stat.

Unless you're a banker or you've been keeping up with the international news, you won't know much about the Caribbean Financial Action Task Force (CFATF). But for clarification, it is an organization of states and territories of the Caribbean basin which have agreed to implement common counter-measures against money laundering.

27 countries in the Caribbean offer offshore banking services - that means banking without full disclosure - using what are called shell companies instead of names. This is done for the purposes of concealment and deception and avoiding having to pay taxes. The EU and the US want to curb the amount of illegal activities connected with that type of banking behavior, and so they've cracked down on all countries that they do business with.

Belize was on the verge of being blacklisted by banks in America and in Europe and so the government took steps to upgrade the laws and the systems to comply. The new FIU Director in his first ever public appearance since taking office almost a year and a half ago, called a press conference to break it down. Here's how he described it:

Eric Eusey - Director, FIU
"Our deficiencies were several. First, in the area of the illegal; our laws were a bit stale dated. Our first money laundering act was an enacted 1996. it was subsequently amended in 2008, but even with that amendment when the review was done in 2011/2012, it was deficient in that for example the penalties for money laundering was too low and they were not strong enough so an urge was made to improve those and those were strengthen substantially in 2014 February act. Where the penalties when you see them, they are referred to as dissuasive. In other words it will change your mind if you want to conduct any money laundering in any of the Financial Institution in Belize. Because that legislation was enacted, it was felt that we are largely compliant in that respect. The other area was the independence of the FIU. It was felt that the FIU was not strong enough and independent of the Government to conduct its investigations and other activities so that they can have an unencumbered result. When the assessment was done on the FIU in 2011, the FIU was housed at the Central Bank and it was felt that was not ideal arrangement. Subsequent to that the following in 2012, the FIU acquired its own building. It acquired its own computer servers and equipment. It engaged system administrator which we didn't have before. Also in 2014, the legislation was amended to strengthen the independence of the FIU. The other area where there was a weakness was that the laws in respect shell banks was not strong enough and that was amended to eliminate shell banks. In other words, you cannot have an entity registered to conduct business but in fact actually doing nothing or just isolated transactions. That is regarded as a vehicle for money laundering. So those provision were put in the law to keep those out."

So, since banking with the promise of concealment and without full disclosure is at an end, does this help or hurt the bankers in Belize? The Governor of the Central Bank says it's hugely beneficial to that important sector:

Glen Ysaguirre - Governor, Central Bank of Belize
"I don't think it should, because these are International Standards that our jurisdictions are required to comply with. So, it's not that there are standards or requirements being applied to Belize. No, these are International Standards and all it means is that Belize, to participate in the international market needs to comply with these standards. So we are just bringing our game up to par. that's how I see it and its going to open opportunities for us. I think the good news that comes from all this that we have been cleared from the ICIG process is that we can now leverage that information to strengthen the attractiveness of our jurisdiction to those that may want to provide correspondent banking services for us. You have to understand it's not the issue with regards to correspondent banking. It's not only related to EML and compliance issues with CFATF. There are other considerations that these large banks must take into consideration when they make that decision and to large extent it may have nothing to do with the jurisdiction, there is the issue of profitability and what they perceive as risk based on balancing the risk against the profit they may make on a small jurisdiction. We are relatively small and so we are not very attractive in terms of generating profits for these large banking corporations and so if they perceive there is any risk they would tend not to do business with the jurisdiction. It does not mean there is something wrong with the jurisdiction or any particular institution in the jurisdiction."

We'll have more on this in tomorrow's newscast in when we will talk to the FIU Director about recent cases of public interest for which his office has been unavailable for comment.

PM: The EU Misspoke On Belize’s Compliance With New Banking Regulations

As we've told you earlier in the news, the United States and the European Union has Belize and other Caribbean countries jumping through hoops to keep their offshore services sector functioning. And two weeks ago, the European Union gave those same countries, Belize included, a body blow when it compounded the present problems by also putting out a blacklist naming 30 countries - very many of them in the Caribbean. It called them "non-cooperative jurisdictions." This can affect not only the offshore sector but can also damage correspondent banking relationships - which is the fate that already befell the Belize Bank. But the The Organization for Economic Cooperation and Development, known as the OECD has sent out a statement scolding the European Union, saying that, as regards money laundering regulations, quote, "a number of countries identified in the EU exercise are either fully or largely compliant (some are) even...early adopters',"

On Friday, the Prime Minister seized upon that point when he spoke to the media on Friday:...

Hon. Dean Barrow, Prime Minister
"OECD has said "this is nonsense." OECD are the ones that are principally in charged and Belize, like all the others are fully compliant. We've signed a general sort of European FATCA, a protocol that requires us to give all the information. But this is the big boys insisting in doing things their way and causing all sorts of difficulties for us and then ceasing on those difficulties to be accused...."

Despite the OECD's rather blunt assessment, the ten European Union countries who are pushing the blacklist have not relented.

Channel 7

#505879 - 07/15/15 06:12 AM Re: FIU: Belize’s Banking Is Highly Transparent [Re: Marty]
Marty Offline

Belize Bank On What CFATF Green Light Means

2 weeks ago, we showed you the press conference hosted by the Director of the Financial Intelligence Unit, and the Governor of the Central Bank of Belize. At that event, they announced that the country's banking practices are more resistant to money laundering and terrorist financing than ever before.

As the lead agencies in the financial and banking sector, they were trying to get all the bankers compliant with the regulations set out by the Caribbean Financial Action Task Force. After months of hard work it was finally accomplished, but with this new level of accountability and transparency, it does affect the off-shore banking sector, which used to offer banking without full disclosure. That confidentiality could have been used by criminal organizations to make illicit transactions.

So, Belize like all the other territories in the Caribbean took steps to insulate against that type of illegal behavior, and now, we've been given the nod as one of the countries that is compliant. Because of the pressures coming down from the finance regulating organizations from abroad, the Belize Bank was one of the local banks which was negatively affected when it lost its corresponding banking relationship with Bank of America. So, today when we got the opportunity, we asked the Executive Chairman of Belize Bank, who also the CEO of BCB Holdings, about how the compliance has allowed the bank to move past this setback. Here's what he said:

Lyndon Guiseppi - Executive Chairman, Belize Bank
"And the reality is that even while Bank of America terminated a number of banks in Belize including Belize Bank, Commerce Bank which is the other corresponding bank that has served Belize for many years, continues to provide banking services. In addition to that the Belize bank staff actively visited New York and Miami during that period and we were able to identify a number of banks who have providing some of those services. They're not providing all of the services but they're providing some and thankfully the relationship with the Central Bank has also allowed us to facilitate wired transfers. The Central Bank has come to our assistance and they're providing support in assisting with the wires that we took out and those banks that continue to have relationships with Bank of America and Commerce Bank are also assisting those banks who have lost the correspondence banking relationships. I think what has happened here is a result of the corresponding bank impasse is that the banking sectors is growing stronger. There's much more collaboration between the individual partners and I'm very confident that in a couple months, this will be something of the past."

Daniel Ortiz
"Sir, we know that the Governor of Central Bank and the Director of the FIU explained this theoretical benefit that each bank will receive post becoming compliant with the CFATF regulations. Has it in that brief period shown any sort of measurable assistance to the Belize Bank?"

Lyndon Guiseppi - Executive Chairman, Belize Bank
"I would say absolutely. In fact I was sharing with the governor last week that we received a call from a bank in the United States post the graduation of VICRG. This is a bank which previously was not interest in doing business in Belize and they're in fact now entertaining request from Belizean Banks to the corresponding banks with them. So, I can't say specifically, it's a result of the upgrade but I feel confident that it has to do with that as well."

Belize is one of 27 CFATF members.

Channel 7


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