US Currency Control green lights Belize banks

Thursday, February 4th, 2016

Belizean banks are completely compliant with United States’ federal banking regulations to prevent money-laundering and any illicit movement of funds which may be used to finance terrorism; U.S. authorities at the Office of the Controller of Currency (OCC) Thomas Curry and the Federal Deposit Insurance Corporation (FDIC) assured Prime Minister Hon. Dean Barrow during his visit to Washington D.C. last Monday to Saturday, January 25-30. This was important good news for foreign investors in Belize seeking to repatriate profits to U.S. banks.FinSec JoeWaight PMbarrow CentralBank Govenor GlenYsaguirre
Prime Minister Barrow’s mission was to resolve the difficulties banks in Belize were having in maintaining correspondent banking relationships with U.S. banks to handle U.S. currency transactions. His delegation included Central Bank Governor Glenford Ysaguirre, Financial Secretary Joseph Waight and Ambassador Mark Espat, who was part of the negotiating team who worked out a solution to the Super-bond payments.
Barrow said the F.D.I.C. had assured him that it had absolutely no problem with Belizean banks’ compliance with the new laws, as the banks had invested considerably in installing the appropriate software and training their staff to ensure they were properly verifying the source of their customers’ deposits to provide all the information the U.S. authorities might require for U.S. transactions. The FDIC officials were so cooperative with Barrow’s mission, that they even volunteered to disseminate the information of the Belize banks’ clean bill of health to any of the smaller banks, with whom Belize might now establish new correspondent banking relations. Barrow said he got the same message from the U.S. Secretary of the Treasury Jack Lew, who said the U.S. banks should not be using the new U.S. laws as an excuse or “scapegoat” for choosing to not do business with Belize, saying they know what is the law, and what is the cost of compliance, and this was simply the cost of doing business.IMG_1508 Central Bank Govnor Glen Ysaguirre
The Belizean banks’ problem arose when a number of the larger U.S. banks, with which they had had correspondent banking relationships in the past, had informed their Belizean partners that they would be terminating the relationship to minimize their exposure to the risk of an infraction against the new U.S. anti-money laundering laws, which now carry million-dollar penalties for any offence.
Prime Minister Barrow returned home Sunday, January 31, and explained the partial success of his mission at a press conference at the Belize Biltmore Plaza Hotel on Monday morning, February 1. Barrow prefaced his report of conditional success by first explaining the position of the larger U.S. banks. He cited the example of Bank of America which was doing perhaps $6-7 million worth of business per year with banks in Belize, but were there to be any violation of the anti-money laundering laws, Bank of America would be liable for over $10 million in fines. In a cost-benefit analysis, the small profits from this volume of business was simply was not worth the risk of the punitive cost of any error which might result in a violation of U.S. laws. As Barrow explained it, Belize is not alone in these difficulties, as many other small jurisdictions in Central American and the Caribbean are in the same boat. For the larger banks doing Billions of dollars in business per year from all their global customers, the profits from little Belize seemed minuscule by comparison, and so negligible, as to be simply not worth the risk of the millions in fines.
Barrow’s efforts to help local banks work out a solution included interceding with a number of smaller banks, with which Belizean banks are presently trying to establish new correspondent banking relationships. Barrow chose not to name any of these banks which may fill Belize’s needs, saying he did not wish to prejudice the ongoing negotiations with any undue publicity. He did not wish to tip his hand as such a premature announcement might cause the correspondent bank to back out of the negotiations.

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