CAB regards EU's decision to 'blacklist' as unwarranted


CAB regards EU's decision to 'blacklist' as unwarranted

Friday, May 29, 2020

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THE Caribbean Association of Banks (CAB) has described the recent decision taken by the European Union (EU) to blacklist some Caribbean countries as unanticipated and unwarranted.

In a release yesterday, the regional entity which represents over 56 banks and financial institutions in the Caribbean said that the EU's decision warrants clear and concise justification and brings to the forefront the challenge faced by many Caribbean islands wherein the goalpost seems to be continuously moving.

Wendy Delmar, chief executive officer (CEO) of the CAB, said that while the effective date of the amended blacklist is to take effect on October 1 — given the current COVID-19 climate — the timing of the report will possibly further exacerbate the significant challenges currently faced by the region's banking and financial services industry.

“This news has understandably generated much discussion, given that many banks and financial institutions within the region are still managing the effects of the loss of key correspondent banking relationships as a result of de-risking over the period 2015 – 2018,” she said.

The EU in March has said that it intends to add three jurisdictions, namely: The Bahamas, Jamaica and Barbados, to their money laundering list, stemming from a revision of the methodology used by to identify high-risk third countries.

Delmar noted the challenges faced by these countries in their correspondent banking relationships which cannot be overlooked.

“In the case of The Bahamas and Barbados the efforts made to become anti-money laundering (AML) and combating the financing of terrorism (CFT)-compliant cannot be overlooked. In fact, both nations were recently commended for the significant strides made in this regard.

“It is especially disheartening to note that the EU has made the decision to add The Bahamas to the blacklist while acknowledging that this nation was in the final stage of the FATF [Financial Action Task Force] process to be delisted, which has been unavoidably delayed by the COVID-19 pandemic. This was the only step missing for The Bahamas to be cleared by the FATF,” she said.

She, however said that from a place of advocacy, the CAB would remain resolute in its position to ensure that decision-makers are forthcoming with the requirements of the region in an effort to meet the demands being placed on Caribbean economies when these “blacklists” are published.

“The further implications to correspondent banking and international trade cannot be denied. It is noteworthy that we do recognise the effects of building strict and relevant compliance practices and policies in an effort at keeping our delicate economies safe, and as such we also have a vested interest in ensuring that we maintain the regulations that are developed and legislated.

“We are eager to work alongside stakeholders and maintain that in order to work together effectively and efficiently, we must maintain healthy, open and honest dialogue, which suggests understanding and an effort to ensure inclusivity as opposed to what appears to be a new era of exclusion,” she said.

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