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#506686 - 08/15/15 10:42 AM De-Risking Banks And The Investment Climate
Marty Offline
Yesterday, the media had an opportunity to speak with Trade Ministry CEO Mike Singh in his role as co-chair of the Economic Development Council - which held a meeting to discuss improvements to the business climate.

Well, it also gave the press an opportunity to ask him about the de-risking that banks from the US and the European Union continue to do. In the process, they're terminating correspondent banking relations. Belize Bank, Belize Bank International and Atlantic International Bank have all been had their ties with Bank of America severed. So, the press asked Singh about the efforts that the Government is making to try to assist the principals of these banks. Here's what he had to say on the difficult issue:

Mike Singh, Ministry of Trade
"We spoke about the issue of the AML issues which is where the corresponding banking issue came up. I think the deputy governor of the central bank did a presentation explaining that this is not a phenomenon that is only affecting the Belize, it really is a regional phenomenon. Bank of America and many of the larger banks are undergoing what we call de-risking and that is through the requirements for reporting to the anti-money laundering authorities, globally, has forced them to start looking at the customers that they have and in reality the customers of their customers. So the issue that happens with these large banks is very simply that if a small country like Belize that has customers that they are unable to verify. The money that they are going to make from having a relationship with a small country and banks of a small country, they weigh the risk benefit, and there is not a whole lot of benefit and there is a greater risk. Because defiance by the authorities in the U.S and Europe are very high. So it's an issue that we just have to learn to live with. I was at a conference with the World Bank a few weeks ago and the topic came up. Every country in the Caribbean is facing this issue and the only way to deal with it is just to learn how to be compliant and to work lobbying at a very higher level for the authorities in the OECD countries to understand the impact. this is having smaller economies and I think we are doing quite a lot of that but until we get to that point, it's just something that we have to learn to live with."

Channel 7

#506773 - 08/19/15 10:51 AM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Marty Offline

Fonseca Sounds Caution On Commercial Banks De-Risking

Recently, there's been a lot of news about the difficulties that 2 banks in Belize have been having after their correspondent banking relationship was severed by the Bank of America. The Prime Minister has commented that it's a situation that is lamentable, but inevitable. Not surprisingly, Opposition Leader Francis Fonseca disagrees. While he had the media's attention today, he took the opportunity to discuss why this issue needs urgent attention:

Hon. Francis Fonseca, Leader of the PUP
"We have heard about offshore banks and correspondent banks. These are terms that have become very familiar to the Belizean people, but the reality is that offshore banks with no corresponding banks, means no offshore banking sector and the essence of offshore banking is the free flow of foreign currency, primarily US dollars through the banks without any exchange control. This is a kin to conducting banking business in the US, but doing it outside of the US. Without these corresponding banks that we have been hearing about then you are forced to do banking essentially back in the United States, which means that Belize offshore banks are no longer attractive and ultimately leads to a loss skilled labor jobs."

"Just to purchase of consumer items from abroad like imported food, or imported electricity, or imported fuel, not to mention capitol items like steel, cement and equipment will become difficult. Nowhere as you all know very well, other than in Belize is the Belize dollar accepted. We can't pay for imported goods and services with Belize dollars. We need hard currency to buy these things with. We need US dollars and even if we have US dollars in this day and age especially, we can't pay any supplier with cash. Even if we could safely transport this cash, they wouldn't accept it, because of all of the rules on money laundering. Nobody accepts cash nowadays. There is almost a presumption of illegality if you try to pay with cash."

He also explained that exporters could have difficulties getting paid from their international customers in the developed countries that are de-risking. So, what's the fix? Well, according to Fonseca, the Government and the Central Bank of Belize need to start an aggressive campaign in the countries that are de-risking to convince them that there is no financial risk to keep their relationships with banks in Belize:

Hon. Francis Fonseca, Leader of the PUP
"Convince the United States and other developed jurisdictions, other developed nations who are blacklisting us that Belize is not risky. If they agree we are not risky, then there is no de-risking to be done. It is as simple as that and that is where our government has been falling down and failing. So we can't stand idly by and do nothing as we seem to have been doing so far, relative to what other jurisdictions have been doing - vey aggressively tackling this issue. The central bank has been leading the efforts in their jurisdictions to address this matter, to meet on a consistent and continuous basis with other countries to try and resolve this matter."

Channel 7

#506949 - 08/27/15 05:41 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Marty Offline

Heritage Bank to also lose corresponding ties with Bank of America
Heritage Bank International, like Atlantic International Bank before it, has received word that their corresponding ties with Bank of America (BOA) is also being terminated as part of the bank’s “de-risking” process. Heritage International is just the latest financial institution in Belize to face such consequences as a result of international financial institutions cutting ties with perceived high-risk jurisdictions. Interestingly though, several weeks ago after Atlantic International had its ties cut, Central Bank Governor Glen Ysaguirre denied reports that Heritage or any other institution would be facing the same outcome.

Chamber Looking for Answers in B.O.A. De-risking

For the past few weeks, we have been reporting about the Bank of America severing ties with banks in Belize. Since then, Heritage Bank has been put on notice that it will also be losing its correspondent banking relationship with Bank of America. The pulling out of BOA from the banks in Belize has been attributed to strict money laundering regulations imposed on the region. But, some parties are more worried about what this means for Belize, while others have attributed it simply to changing times and policies. Today, we asked President of the Belize Chamber of Commerce and Industry Arturo Vasquez, to weigh in on how the loss of correspondent banks affects business in Belize.

Arturo Vasquez, President, BCCI

“I wish I had the answer to that, really. It is not a good position for banks to not have international representation. What we have been hearing is that it has been affecting the international part of the banks. Belize Bank, I think is the only local one, I believe, where Bank of American has taken away the relationship. But since then they have established their own relationships. I know from experience that you can still transfer money to and from outside the Belize Bank and all the other banks. Scotia Bank, of course, is in a different position. Heritage Bank, we heard just recently, that they got notice from Bank of America. The Chamber, from since this thing started, we have tried to have discussions with the President of the Banking Association and we met with them twice. We met with the Governor of the Central Bank because, really, what we want to have a good position or a good understanding of what is happening. As I mentioned, previously, on a talk show, that this seems to be coming at us as surprises every so often. So, I don’t really know if anybody has a direct answer hopefully somebody will have that at some point. The Chamber is planning a mixer for this Wednesday, where we are trying to have the Governor of the Central Bank and maybe some of the other banks representatives speak on this but the word de-risking that has been used is something that I am worried about. If we would know what the risks are then we would know why they are de-risking from us. Money Laundering is one of the suggestions but really I am not sure that anybody, unfortunately, has the answer as to what will happen tomorrow with this.”

Channel 5

To lose correspindent ties means one can't wire money abroad or receive money from abroad

#507221 - 09/07/15 11:04 AM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Marty Offline

US Ambassador says Embassy concerned about impacts of bank de-risking in Belize

The United States Embassy in Belize is greatly concerned about the issue of international banks “de-risking” and cutting ties with financial institutions in Belize and the impacts it may have on the Belize economy and economic activity with the US, said Ambassador Carlos Moreno.

Moreno spoke on the issue at Saturday’s opening ceremony for the 19th annual Expo Consumer Trade Show. He highlighted the continued economic relations between Belize and the US and said that the Embassy has monitored the de-risking situation closely as it continues to develop.

According to Moreno, the Embassy has contacted the US Treasury Department and has started the process of opening the lines of communication to see if the issues resulting in Belizean financial institutions losing corresponding ties with international banking partners can be resolved. Moreno noted that the issue is one affecting countries all throughout the region. He said the Embassy is trying to facilitate a resolution to the issue so as to negate any possible negative effects “de-risking” may have on the country.

Moreno said the Embassy will continue to do its part in facilitating good economic and trade relations between both nations. He added that with the new global regulations, and considering that many of the international banks de-risking are privately owned, the only thing that can be done is to conform local standards to the same international standards.

The Reporter

#507231 - 09/07/15 12:22 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
ragman Offline
In other words Ambassador Carlos Moreno is saying, do what the US government says or else.
considering that many of the international banks de-risking are privately owned, the only thing that can be done is to conform local standards to the same international standards

These "international standards" were set by the US government to secure more tax money under the guise of money laundering. It is really to tighten up on the enforcement of US tax laws to feed the insatiable appetite of government. For what little money is gained many innocent people will be greatly inconvenienced at the least.

Think about it. What does de-risking mean? It means that Banks will be heavily penalized or put out of business if they don't follow the rules of the US regulators. Already banks in the US and other countries have had to pay billions in fines and penalties and they want to rid any business which might subject them to this.

Some posters have stated that this will have no effect on them but I believe they are wrong. When local businesses can not make transfers through banks to buy goods from other countries it will effect many in Belize with some goods hard to find and higher prices. In the long run it will speed up the death of USDA as a world trading medium. Several major countries in the world have been working on this for some time now. This folly will hurt the very USA citizens it is claiming to protect in the end. 428 more days till sanity has a chance to return.
Somewhere on a beach in Belize

#507235 - 09/07/15 01:26 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Diane Campbell Offline
Before coming to Belize Ambassador Moreno was a judge, not an economist.

I do hope there is some resolution .....

#507237 - 09/07/15 01:40 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Shyboy Offline
Ragman... You hit that right on the head. I've been spouting the same thing but not as well.
A little known fact... Women who are overweight tend to live longer than men who mention it...

#507238 - 09/07/15 01:50 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Diane Campbell Offline
Just heard a rumour that Atlantic has secured a new correspondent bank.

#507243 - 09/07/15 03:58 PM Re: De-Risking Banks And The Investment Climate [Re: Marty]
Shyboy Offline
Yes: that was the reason for Timan's concern yesterday about "document the purpose of the wire" and the thought that "it do not smell well".
Just more hurdles to conduct everyday business.
The long arm of the USA reaches the beaches on the island with no problem.
A little known fact... Women who are overweight tend to live longer than men who mention it...


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