With CARICOM alarmed at moves by international banks to cull their correspondent banking relationships in the Caribbean, the issue will be discussed at an energy security summit in Washington DC next week and the US administration has indicated Washington’s willingness to assist in tackling some of the issues faced.
US Vice President Joe Biden will host the U.S.-Caribbean-Central American Energy Summit on May 3 and 4 in Washington, DC and a number of high-level officials from across the region are expected to attend. President David Granger and Trinidad’s Prime Minister Dr Keith Rowley are among the Heads of State who will be in attendance.
Next week’s summit builds on the work of the Caribbean Energy Security Summit that the Vice President hosted in January 2015. At the summit, the results of the energy task force for the Caribbean and Central America announced by US President Barack Obama last year will be released. The summit is also expected to identify steps that the United States and regional leaders can take to ensure that citizens of these regions achieve a more secure, affordable, and clean energy future.
In a conference call with reporters yesterday, US administration officials outlined some of the topics to be discussed and, apart from energy security and the challenges facing the region in this regard, there will be sessions on security issues and correspondent banking.
CARICOM leaders had previously expressed concern at the decline in correspondent banking in the region. In recent years, international banks have begun shedding correspondent banking relationships with financial institutions in the region and other developing countries because of the perceived risk of money laundering and other financial crimes.
This was sparked by a series of prosecutions of big international banks in the US for lapses in their controls relating to money-laundering, sanctions and the financing of terrorism. Some have had to pay billions of dollars in fines. This “de-risking” has raised alarm within CARICOM as it can affect an entire range of services including money transfers.
In February, Belizean Prime Minister Dean Barrow called on CARICOM to wage a relentless campaign against what he described as the “possible banking Armageddon that we face” from bank de-risking.
The Prime Minister proposed on behalf of Belize that banks across the region get together and as a bloc approach target banks in the US for pooled correspondent services. “That way we should be able to leverage the critical mass needed to make our business volume worthwhile in terms of the risk/reward equation. The modalities and logistics will take some working out but clearly are not beyond our skills,” Barrow stated.
US administration officials noted yesterday that the issue is a complex but serious matter with several factors involved. While pointing to the threats that have to be tackled including money laundering, it was emphasised that the various issues cannot be solved in one go. However, the officials said, Washington is willing to provide technical assistance to countries to address the issues and gaps that exist. This matter will be the subject of discussions when Caribbean leaders meet top US administration officials next week. `