“Looming” issue of de-risking in the region remains high on CFATF agenda

DPI, Guyana, Tuesday, November 14, 2017

Executive Director of the Caribbean Financial Action Task Force (CFATF), Calvin Wilson has said that de-risking or the loss of correspondent banking relations is looming largely across the Caribbean region because of what is being perceived by international financial institutions as “high-risk jurisdictions operating in a high-risk region.”

Wilson is disagreeing with this perception on the basis that many of the countries have taken stringent steps to correct the deficiencies in their Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime, during their mutual evaluations. He disclosed that many of the formerly high-risk countries are now compliant or “largely compliant” with the standards set by the Financial Action Task Force (FATF).

However, the CFATF Executive highlighted that this progress is not being translated to regulators around the world.  “We think that if that were to be taken into account, then some of the decisions that have been made with regard to de-listing would not have been taken,” he noted.

More outreaches, Wilson said, may be necessary to set the record straight. At a meeting organised by the Caribbean Community (CARICOM) held in Antigua and Barbuda towards the end of October, 2017, the region embraced the guidelines set by the FATF, as it relates to correspondent banking.

CFATF, he said has been mandated to keep the matter of de-risking high on its agenda and has committed that work will be undertaken by both the membership and secretariat in terms of engaging with all stakeholders, such as the CARICOM Secretariat, the Eastern Caribbean Central Bank, the Caribbean Development Bank and all countries within the region.

Dialogue with the International Monetary Fund (IMF) and other organisations, which are witnessing the effects of de-risking in the region and across the world, will be sought in anticipation of a resolution.

He pointed to the fact that de-risking has a lot of negative effects on the ordinary citizens, for example the ability to send money to family and friends may be impeded due to the loss in correspondent banking relations.

Wilson noted too that some money transfer companies are being de-banked by banks in the region, which means, not only the man in the street, but major businesses are affected as well.

De-risking was addressed during the 27th Forum for Heads of Financial Intelligence Unit (FIU) and the CFATF Working Group on Risks, Trends and Methods (CRTMG) Meeting held on Sunday, the first day of the 46th Plenary and Working Group Meetings being held at the Marriott Hotel.

 

By: Stacy Carmichael

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