By Jolly Green

Between
money laundering and financing terrorism Saint Vincent and the
Grenadines after continually attracting global attention have helped
to bring about losing the U.S. correspondent accounts for not just
themselves but the whole Caribbean in an action called de-risking.

At
least nine Caribbean banks that have lost access to U.S.
correspondent accounts as a result of “de-risking” now access
U.S. dollars indirectly, usually at higher costs, through their ties
to the U.K. and other overseas financial institutions.

When
a US bank passes a transaction through their system which is
unknowingly linked to money laundering or the financing of terrorism,
if discovered the US bank will feel the wrath of the US authorities
with massive fines being imposed. That is the risk they run with
dealing with Caribbean banks. Caribbean banks simply cannot be
trusted with the golden rules of know your customer or the attention
to proper compliance.

Years
after first drawing global attention, de-risking, which involves the
termination of certain accounts by global lenders to mitigate
exposure to legal and regulatory penalties and thus reduce compliance
costs, still impacts the Caribbean financial services industry.

As
a result, Crown Agents Bank, a U.K.-headquartered financial
intermediary, now handles U.S. dollar-clearing tasks for several of
the affected lenders through its access to U.S. correspondents.

Data
administered by the Society for Worldwide Interbank Financial
Telecommunication shows a 15 percent decline from 2011 through 2016
in the number of correspondent banks around the world that process
Dollars or Euros. In 2016 alone, Caribbean jurisdictions and small
Pacific states experienced the highest rates of decline, at about a
10 percent loss.

But
the crunch in the Caribbean became real in 2016 when a story appeared
about a Saint Vincent and the Grenadines-registered offshore bank
that passed money through the commercial system. The money was
Venezuelan government money sent to the left wing Spanish political
party ‘Podemos’ a left-wing Populist Party that claims it seeks
to address the problems of inequality, unemployment and economic
malaise that followed in the wake of the European debt crisis.

An
interesting in-depth article about this matter can be found at:

Within
a few months of Mr. Binose writing the article, the bank in question
had left SVG and relocated to Puerto Rico. I am not sure if they
actually relocated or if they simply started up a new bank because
although the bank still has some Vincentian employees listed, it has
a different name and is in a different domain. Perhaps some of the
records died with the old bank in SVG; if this is a new bank, there
is little the authorities in the new domain can do by way of
inspecting records of the old.

Why
President Maduro of Venezuela was sending money to Spain for this
article is not important. What is important is that it helped wreck
the correspondent banking system in the Caribbean.

Today,
nine of 53 members of the Caribbean Association of Banks, or CAB, a
St. Lucia-based industry group that mostly represent smaller lenders
in the region, still do not have a U.S. correspondent account,
whereas before de-risking began, all members held at least one.

All
nine have since on-boarded as clients with the British, Crown Agents
Bank, which holds direct relationships with U.S. correspondent
institutions

Of
course, it was not just this SVG incident that brought about this
crisis, which is costing banks and their client’s substantial
increased costs’. There were other incidents that were
internationally reported and recorded.

The
following matter saw the whistle-blower suspended from her Saint
Vincent job at NCB Bank. A worker at the National Commercial Bank
(NCB) was suspended for allegedly breaching the institution’s
confidentiality rules. According to a statement by Prime Minister and
Minister of Finance, Dr. Ralph Gonsalves who said “We have someone
at the bank whom I’ve been advised has been suspended. They
disclosed confidential information,” Gonsalves, said at a press
conference. According to Gonsalves, someone supplied Opposition
Leader Arnhim Eustace with sensitive information relating to
transactions at the NCB Bank.

What
eventually happened to the lady I have no idea, but usually, in such
matters, the accused is given a raise and a superior position to keep
them quiet? But what happened, in this case, I do not know. Following
now is the record of events.

On
November 2009, Eustace charged that US $1 million had been deposited
in an account at the NCB, and called on Gonsalves to answer several
questions relating to the deposit. It did not appear to be the
following million because of the outcome of the following million.

In
2009 a member of Saint Vincent and the Grenadines government, a
minister, took an old bag into a bank that contained a million US
dollars in cash, dollar bills of various denominations. The Minister
of Finance at that time was Dr. Ralph E Gonsalves who was and still
is the islands Prime Minister. The bag man left the bag of dollars at
the bank and told them to change the contents into EC dollars, cash.
The bank was the NCB Bank which was owned by the Government and came
under the watchful eye of the Minister of Finance, who was and still
is the Prime Minister.

The
bank called up the bag man later that day and said they were
unwilling to change the US money into EC Dollars, come and collect
the bag of cash. Sorry, I forgot to tell you the bag man is better
known to Vincentians as Julian Francis, first cousin of Dr. Ralph
Gonsalves, the Minister of Finance and Prime Minister. Well, we must
assume the bag man collected the dollars because within a few days
all the family, friends and ULP colleagues of Dr. Ralph E Gonsalves
Minister of Finance and Prime Minister were lined up in banks with
fistfuls of US dollars requiring them to be exchanged for EC Dollars.
This is not new news, it has been reported many times since
happening.

What
is strange, none of these actions were reported to the police as
would happen if you the reader went into a bank with extremely large
sums of US dollars to change. The bank was also obliged to report
such matters and behavior to the Financial Action Task Force [FATF]
in Saint Vincent who came under auspices of Supervisory, and
Regulatory Division (SRD) of the Ministry of Finance and final
control of that department is the Minister of Finance and Prime
Minister Dr. Ralph E Gonsalves.

There
is a ‘Financial Intelligence Unit’ FIU in SVG which is well
established and operational, with sufficient legal authority and
highly motivated and professional staff. It is the primary AML/CFT
institution in SVG and is constituted as a hybrid administrative/law
enforcement FIU reporting to the Minister of Finance. So what went
wrong on this occasion? Why did they not act and take action in this
matter? We know that most of the leading ULP hierarchy and the
Minister of Finances family and Cousin Julian were in the mix, but
why did both FATF and FIU fail to act?

The
IMF wrote in a report in 2010 ‘There is good cooperation between
the FIU, law enforcement authorities, and the Attorney General (AG).
The FIU staff conducts joint operations and investigations with the
police and customs authorities and regularly applies to the court for
production orders in coordination with the DPP. This has helped to
develop prosecutions of ML cases. Cooperation arrangements could
nonetheless be enhanced through a more formal framework between the
FIU and domestic law enforcement authorities. The AML/CFT expertise
within the police and customs force could also be enhanced, and all
agencies involved in AML/CFT could benefit from more advanced
training, especially for complex ML and FT cases. Both the DPP and
the AG’s office are under-resourced to conduct complex ML
prosecutions, especially those with international dimensions.

I
wish I could have advised the IMF at the time of how everyone
mentioned in their report was in some way or other more than just
associated with the Minister of Finance and Prime Minister Ralph E
Gonsalves. They are his people he owns them; they are his collection
of Barbie’s.

2008,
Panama: The Stolen Panama papers also give an insight into offshore
activity by SVG and others.

https://offshoreleaks.icij.org/search?c=VCT

https://offshoreleaks.icij.org/nodes/100628654

https://offshoreleaks.icij.org/nodes/100636366

There
are legitimate uses for offshore companies and trusts. I do not
intend to suggest or imply that people, companies, or other entities
included in the ICIJ Offshore Leaks Database have broken the law or
otherwise acted improperly.

2015:
An employee in the Swiss Branch of HSBC stole records and made them
public through the authorities and others. It came to light via those
records as follows in yet another Binose report. But this time it
involved 16 bank accounts at HSBC in Switzerland amounting to US$48.7
million.

2015,
St Vincent: A document purporting to show Prime Minister Dr. Ralph
Gonsalves as the holder of a Swiss HSBC account with US$19 million
was circulating. Gonsalves denounced the document as false. A
statement was made by the ULP via a press release and the ULP party
website on Dec. 6, 2015 at 12:38 p.m.:

“The
Prime Minister of St. Vincent & the Grenadines, the Hon. Ralph E.
Gonsalves, has instructed the Office of the Attorney General to
immediately contact the Government of the United States of America
under the Mutual Legal Assistance Treaty to investigate a fraudulent
bank document with an alleged bank account domiciled to an address in
Brooklyn, NY USA”.

“He
has further instructed the Commissioner of Police to open a criminal
investigation into the fraudulent document locally, which includes
any regional or international operatives currently working in St.
Vincent & the Grenadines, as well as to immediately contact
INTERPOL, the Regional Security System and the Joint Regional
Intelligence Fusion Centre of IMPACS to assist in the investigation.
He has also instructed the Commissioner of Police to alert the
Director of Public Prosecution of these investigations.”

Since
that matter surfaced not a word about the outcome of the
investigation or any evidence an investigation took place.

https://www.iwnsvg.com/2016/07/24/any-word-on-the-hsbc-swiss-bank-account-probe-gonsalves/

https://www.caribbeannewsnow.com/2016/08/10/letter-a-response-to-peter-binose-or-fishing-for-punishment-from-ralph/

If
you don’t read all the online stories and the comments to them you
will never be wiser to the facts.

Jolly Green

END

DISCLAMER: The opinion, belief and viewpoint expressed by the author do not necessarily reflect the opinion, belief and viewpoint of iNews Cayman/ieyenews.com or official policies of iNews Cayman/ieyenews.com