correspondentbanking1

Financial Action Task Force (FATF) Releases Guidance on Correspondent Banking Services

correspondentAlicia Nicholls The Paris-based Financial Action Task Force (FATF) has released its long-awaited guidance on the application of FATF standards in the context of correspondent banking services following its plenary session held October 19-21st, 2016. The purpose of the guidance is to address de-risking and has been prepared in collaboration with the Financial Stability Board […]

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37 Comments on “Financial Action Task Force (FATF) Releases Guidance on Correspondent Banking Services”

  1. David October 23, 2016 at 9:14 PM #

    FATF congratulates Guyana on AML/CFT Improvements

    by caribbeantradelaw

    Alicia Nicholls At its recently held plenary session on October 19-20, 2016, the Paris-based Financial Action Taskforce (FATF) congratulated Guyana on the "significant progress" the country has made in addressing the deficiencies in its framework for anti-money laundering/combatting the Financing of Terrorism (AML/CFT). Background Since its establishment in 1989, FATF has sought to protect the integrity of […]

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  2. Pachamama October 23, 2016 at 9:19 PM #

    David

    This seems to us as a distraction. Barbados has more germane issue, basis issues, to deal with.

    Unless service to empire is primary consideration.

    Like

  3. David October 23, 2016 at 9:23 PM #

    @Pacha

    This derisking business has the potential to undermine the banking system in this part of the world, trade and remittances and so on

    Like

  4. Pachamama October 23, 2016 at 9:46 PM #

    OK

    Like

  5. chad99999 October 24, 2016 at 12:42 AM #

    The benefit of being in America’s backyard is that the United States cannot allow the Caribbean to go completely to hell, lest Russia, China and other powers decide to take advantage of the situation and set up military bases that can spy on and harass US commercial and military activities.

    In particular, it would be reckless for the United States to undermine the prosperity of free-market economies in this region by obstructing banking transactions.

    So Alicia is blowing hot air and making empty threats with this onslaught of warnings from her friends at the World Bank. These people seem upset at lottery businesses based in Jamaica, but I haven’t figured out why they are targeting Belize and smaller islands like Dominica, St. Vincent and Antigua.

    David should provide more background material when he promotes these articles from Caribbean Trade Law.

    Like

  6. David October 24, 2016 at 4:04 AM #

    @chad99999

    You seem happy in the hope that North America’s geopolitical interest will always overlap with the Caribbean. Here is a view from a Jamaican perspective.

    http://jamaica-gleaner.com/article/news/20161018/de-risking-regional-avenue- towards-financial-independence

    >

    Like

  7. Bernard Codrington. October 24, 2016 at 12:53 PM #

    @ David,

    I thought we had covered all the areas in this derisking issue. There can be no problems for Barbados where the majority of the Banking System is comprised of foreign subsidiaries of Canadian banks. The two T&T banks have not registered any complaints with the local Financial Authorities as far as I know.

    I think that Barbados financial system can have minimal impact on what ever financial infelicities are being policed by the FATF.

    Like

  8. David October 24, 2016 at 12:55 PM #

    @Bernard

    The issue is about shoring up the financial sector in the Caribbean.

    Like

  9. Bernard Codrington. October 24, 2016 at 1:00 PM #

    @ David contd.

    The costs of satisfying FATF will result in more costs and inconvenience to the customers of the commercial banks. Already a Canadian bank is shutting down its wealth management arm.

    Like

  10. Bernard Codrington. October 24, 2016 at 1:25 PM #

    @ David, at 12:55PM

    Shoring up from whom? or what? The Caribbean is part and parcel of the international capitalist economic system which is intrinsically unstable. We have to live with the uncertainty and be able to navigate our way through these vicissitudes in the world economy.
    BNOC was set up by GOB to reduce and manage the impact of fluctuating oil prices some unthinking commentators jumped on the Privatization bandwagon and promoted the idea that it should be sold. Are the days of fluctuating oil prices over?

    BNB was set up to lead the financial sector into financing local business. Somebody woke up one morning and decided to sell it. Now we claim that local business is being starved of finance.

    We Barbadians need to ask ourselves who are these recommendations benefitting? And stop letting International bodies set agenda for us. So take Pachamama’s intervention seriously.

    Like

  11. Anonymouse - The Gazer October 24, 2016 at 1:28 PM #

    Similar thinking up behind the chadster on this one.

    Like

  12. Anonymouse - The Gazer October 24, 2016 at 1:28 PM #

    similar thinking to the chadster

    Like

  13. David October 24, 2016 at 1:56 PM #

    @Bernard

    You need to appreciate the volume of business done by indigenous financial institutions in the region. To be short sighted to the point of assuming the USA will not allow derisking to adversely impact the Caribbean is defeatist. Also you assume foreign banks would have the appetite to write or acquire all the business there is. Why would governments not want to defend threats to local FIS? Do you know this matter has decimated Belize and to a lesser extent Antigua? And international FI are located in the two countries.

    >

    Like

  14. Simple Simon October 24, 2016 at 2:01 PM #

    Bernard Codrington. October 24, 2016 at 1:00 PM “The costs of satisfying FATF will result in more costs and inconvenience to the customers.”

    Indeed.

    Satisfying FATF is already proving to be as annoying as hell.

    Just recently my bank called me multiple times (I had been away on a little once every five years vacation) to order me to bring in evidence of my identify, and of my address.

    I have been banking with this same bank for 48 years (Barack Obama was in diapers then I think) have lived at the same address and had the same phone number for more than 30 years.

    So why the hell is my bank bothering me with this American FATF nonsense.

    My account balance is always under $5,000 Barbados dollars.

    Because all of my earnings have been put into the graves of my parents, and the heads of my children, so why is the American government and the Canadian banks annoying me in my old age.

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  15. Simple Simon October 24, 2016 at 2:03 PM #

    I owe the American government NOTHING.

    I owe the bank very little, and I pay my bill on time.

    So what is their problem.

    Why do they go through the elaborate pretense that they do not know me?

    IT IS AS ANNOYING AS HELL.

    Like

  16. Bernard Codrington. October 24, 2016 at 3:17 PM #

    Simple Simon,

    I have the same problem. These’ know your customer” ‘derisking exercises are disconcerting for the aging population and brings no meaningful benefit to arresting the financial collapse of big banks. Moreover they open the society to identity theft.

    Like

  17. David October 24, 2016 at 3:24 PM #

    @Bernards

    You should know that FATF will not go away so save the bitching and comply 😀

    Like

  18. Bernard Codrington. October 24, 2016 at 3:32 PM #

    @David at 1:56 PM

    What exactly are these threats to the local / Barbados FIS? I am Barbadian . I put Barbados first. I do not at this stage of my life want to spend time on Belize and Antigua.

    Like

  19. David October 24, 2016 at 3:36 PM #

    Think about it, derisking and loss of correspondent banking compromises the whole industry.

    Like

  20. Bernard Codrington. October 24, 2016 at 3:41 PM #

    @ David

    FATF is already redundant. It is only a matter of time. It is already ineffectual and those who it was trying to ensnare have already gone on to a new game.

    Like

  21. Bernard Codrington. October 24, 2016 at 3:45 PM #

    @David at 3:36pm,

    Who in this Digital age really needs a correspondent bank?

    Like

  22. David October 24, 2016 at 5:53 PM #

    The Digital Age is not mature enough to replace the banking system.

    Hopefully you heard Avanash Persaud on this evening’s news opining on this very subject. If you did you would have heard him expressing similar concerns to those of BU.

    Liked by 1 person

  23. NorthernObserver October 24, 2016 at 6:45 PM #

    “Think about it, derisking and loss of correspondent banking compromises the whole industry.”
    and there in a nutshell you have captured the essence of major nation foreign policy.

    Create obstacles where hopefully the majority of their citizens will do what THEY desire, without removing choice.

    Like

  24. NorthernObserver October 24, 2016 at 6:52 PM #

    “It is already ineffectual and those who it was trying to ensnare have already gone on to a new game.”

    True for the biggest of fish. However, the “fear factor” cannot be overlooked. And this could affect significant numbers, who maybe the majority in numbers but not in money. The old 80-20 rule.

    Like

  25. Bernard Codrington. October 24, 2016 at 8:03 PM #

    @ David at 5:53PM

    Who is replacing the Banking system with a Digital system? Certainly not this trained economist. I specifically referred to the correspondent bank relationships. Which is simply a bills clearing relationship between a local bank and a bank overseas. Its purpose generally speaking is to effect the transfer of funds between two banks on behalf of their customers, mostly to effect payments for goods / services. Can you think of alternative ways of transferring funds?

    Like

  26. David October 24, 2016 at 8:23 PM #

    @Bernard

    Digital or not it must suffer oversight. Derisking threatens the indigenous banking system and undermines a key determinant of the relationship i.e. a local bank knowing local customers better than foreign.

    Like

  27. Bernard Codrington. October 24, 2016 at 8:29 PM #

    Nonsense is nonsense regardless of whose mouth it is coming from. I prefer not to discuss people but issues. Each argument can stand on its own based on its framing/ context ,the assumptions on which it is based, and the logical rigour with which it is executed.

    Like

  28. David October 24, 2016 at 8:35 PM #

    @Bernard

    You are saying you do not accept if indigenous banks are unable to maintain correspondent banking relationships up North it will have no effect on our jurisdiction?

    >

    Like

  29. Bernard Codrington. October 24, 2016 at 8:37 PM #

    @ David

    Let us agree to disagree on this one. When it disrupts the real economy of Barbados , I will revisit the issue.

    Like

  30. millertheanunnaki October 24, 2016 at 9:10 PM #

    @ David October 24, 2016 at 8:23 PM
    “Digital or not it must suffer oversight. Derisking threatens the indigenous banking system and undermines a key determinant of the relationship i.e. a local bank knowing local customers better than foreign.”

    Now that Barbados is to become a duty-free shopping zone for holders of certain kinds of for ‘hard’ currencies (US$, Can $ and £ sterling) what are the possible ramifications for the local banking sector?

    Would the ‘average’ Bajan be able to keep foreign currency accounts to settle electronically payment for duty-free purchases or would the duty-free concessions be available only to the elite, the business class and those well-versed in the art of money laundering? Why would ‘resident’ duty-free shoppers have to walk around with loads of foreign cash?

    Would the whole Central Bank Act have to be either entirely rewritten or, more appropriately, scrapped as the ‘devalued’ Bajan dollar would no longer be the preferred currency of the realm?

    Like

  31. David October 24, 2016 at 9:13 PM #

    @Miller

    TBD

    Like

  32. David October 25, 2016 at 3:42 AM #

    Interesting state of affairs with CETA and when one factors that Brexit is in the queue as noted by the author…

    EU-Canada CETA trade deal hangs in the balance
    by caribbeantradelaw

    Alicia Nicholls The Comprehensive Economic and Trade Agreement (CETA) negotiated between the European Union (EU) and Canada appears to be in limbo as Belgium’s French-speaking Walloon region has said a strident non (no in French) to the deal. According to media reporting, two key issues appear to be sticking points for the Walloon government. Firstly, there are concerns […]

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  33. David October 25, 2016 at 3:50 AM #

    @Bernard

    You need to do some research. Are you aware some offshore companies have been unable to open accounts in Barbados? Given that the offshore sector is a key plank in the economy this situation should qualify using your criteria to be concerned?

    Like

  34. chad99999 October 25, 2016 at 2:35 PM #

    David

    Please connect the dots.
    Are you saying that all the fuss about losing bank correspondent relationships is about the potential damage to our tax haven status (i.e., our ability to attract dark money from Canadian businesses and from high net-worth Canadians)?

    Like

  35. David October 25, 2016 at 2:47 PM #

    @chad99999

    You have taken one example of the harmful impact of derisking on the offshore industry to extrapolate yo an extreme position?

    Like

  36. Well Well & Consequences October 26, 2016 at 2:32 PM #

    http://www.barbadostoday.bb/2016/10/26/beacon-supports-regulatory-move/

    Still on a financial note, introducing these new regulations will certainly cause misery to the existing insurance companies who claim that they are driving down premiums.

    Like

  37. David October 28, 2016 at 7:25 PM #

    What is Dr. Justin Robinson saying this evening? Global banks in our region might have to leave and it will be up to the indigenous banks? It gets more interesting.

    Like

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