Minister Gibson warns against unexpected effects of de-riskingPOSTED: 06/17/16 7:24 PM
St. Maarten News –A delegation put together by the Central Bank that included Finance Minister Richard Gibson addressed the “vexing issue” of de-risking in the United States in an attempt to prevent that the islands fall to the same level as Belize that is currently unable to use the international banking system to pay for its imports.
Minister Gibson said that the American counterparts had lent a willing ear and it looks like St. Maarten and Curacao may count on some exceptions that have also been applied to Mexico.
“De-risking has been a problem throughout the Caribbean and the world,” the minister said at yesterday’s press briefing. “Countries have to abide by regulations aimed to curb money laundering and the financing of terrorism. But these regulations have been put together in such a way that they bring about consequences nobody had foreseen.”
When anti-money laundering and Cft regulations are not met, Gibson continued, banks are fined substantially. “The unintended consequence has been that some banks have pulled out of markets altogether because they do not want to be exposed to these astronomical fines.”
The minister mentioned Belize as an example of a country that has been left completely without correspondent banking. “This makes it virtually impossible for Belize to make cross-border payments for its imports. That is a stab of death. If you depend on imports and you are not able to pay for them then you will not be able to order the equipment and the goods you need to keep your economy running.”
The Bank of America has withdrawn from the Belize market. And the country is now surviving by processing its payments through its Central Bank.
“St. Maarten and other islands are under the same threat,” Minister Gibson warned. “Some banks have already indicated to some clients that they have to close their accounts. If this grows into a situation akin to the one in Belize, St. Maarten will not be able to have a correspondent bank to process its payments.”
The Central Bank delegation to the United States consisted of President Emsley Tromp, Finance Minister Gibson and his colleague from Curacao, José Jardim.
The delegation visited the American justice department, the UD treasury, the State Department and also met with representatives of the White House.
Minister Gibson said that the US has made some exceptions for Mexico that was facing the same situation as Belize. “We are substantially compliant with anti-money laundering regulations. Based on that, we asked for exceptions similar to Mexico and we did not get a negative reaction,” Gibson said. “Steps are now being taken to see if a similar arrangement could apply to St. Maarten.”