President Obama,I thank you for the opportunity for this forum to address a number of serious issues affecting all of our Caricom countries and we trust that this visit will set the foundation for a more meaningful Caricom/US relationship that will foster increased levels of cooperation.
Mr. President,there is a potentially devastating threat to the financial services sector of Caricom member states which will increase our vulnerability and could result in the erosion of the developmental gains that we have made over the decades.
Our Region has been unfairly labelled as a high-risk area for financial services. Similarly,Mr President, the 2015 International Narcotics Control Strategy Report of theUS State Department has listed several of the member states of CARICOM asjurisdictions of major concern for money laundering. Incongruously, these small jurisdictions with under USD 5 Billion in deposits are placed at the same risk level as the UK, France, Germany and China with trillions of dollars in assets.
Mr. President, all of our countries have fully implemented the requirements of the Financial Action Task Force to counter money laundering and terrorism financing.
We continuously strengthen legislation and bolster our regulatory and enforcement machinery,utilising extremely scarce financial resources, which otherwise would have been allocated to poverty alleviation.
Our jurisdictions are scrutinised, in every detail, by the IMF and the Caribbean Financial ActionTask Force and we have been found to be in full compliance with the highest international financial standards.
In many instances our regulations and enforcement practices are far more stringent than other countries that are deemed to be compliant yet, we are being punished instead of rewarded for our commitment in the fight against money laundering and terrorism financing.
Incidentally, if all the assets and transactional values of the financial institutions of CARICOM countries were to be aggregated, they would amount to less than 0.1% of the total global amount.
Clearly, the region could hardly be a serious risk, much less a high-risk area for financial services or a threat to the stability of any banking institution, financial market,or any nation. But, this arbitrary and unsubstantiated categorisation as a high risk area is causing correspondent banks in the United States to evaluate the risks of being penalised for the seperceived money laundering breaches against the very modest rewards for doing business with our banks. As a consequence, they have been closing their corresponding relationships with our banks because the perceived potential risk does not justify the reward.
This is evidently, a skewed perception, particularly as none of the significant enforcement cases brought against major banks operating in the USA, amounting to over USD 16 Billion in fines, had any affiliation whatsoever with CARICOM based banking transactions.
Sir, unless this situation is addressed with urgency, the indigenous banks in each of our countries will be forced to close their doors, not because of any inherent difficulties in the banks themselves, but because they are constrained from transacting and settling transactions in US currency, which in essence, is the global trading currency of choice.
The impact of such a development on our economies would be calamitous. This certainly would be contrary to the espoused strategic interest of the US to support the developmentof Caricom countries; its third border, through increased investment and trade.
Trade andInvestment would decline, revenues would be decimated, poverty would spread,and unemployment would increase. Crime,including drug trafficking, would spiral as our capacity for containing it would be reduced.
The increased vulnerability of our countries and the attendant consequences would not be limited to the borders of our small countries; they will inevitably reach the shores of the United States.
Mr. President, severe and extremely harmful reputational damage is being done to our jurisdictions by this unilateral categorisation of our member countries by the State Department thereby, eroding our competitiveness and threatening our very survival.
In this context, Mr President, we would ask that this harmful categorisation of the Region as a high-risk area for financial services be urgently reviewed and reversed. It is flawed and serves no other purpose but to reduce competitiveness and to increase the vulnerabilityof our respective countries.
Mr. President, we are not here cap in hand to solicit the United States. We are here to dialogue as sovereign nations with a contribution to make to our common humanity, to seek a more supportive response for our efforts and a reversal of the sepunitive unilateral acts committed against our member states.
We would urge you, Mr President, to cause your authorities to review all these matters in support of our competiveness and in strengthening the sustaining bonds of friendship that have so long endured between our nations.