AML/CFT 5TH AN­NUAL CON­FER­ENCE Data leaks seen as turn­ing away in­vest­ment

Jamaica Gleaner - - BUSINESS - Steven Jack­son Se­nior Busi­ness Re­porter steven.jack­son@glean­

DATA LEAKS and ac­count clo­sures by over­seas banks are taint­ing the Caribbean as a vi­able place for in­ter­na­tional busi­ness, ac­cord­ing to at­tor­ney and for­mer bank­ing ex­ec­u­tive Ch­eryl Bazard.

Th­ese leaks, in­clud­ing the ‘Panama Papers’ and the ‘Ba­hamas leaks’, are in­creas­ingly re­veal­ing con­fi­den­tial in­for­ma­tion, while ac­count clo­sures linked to de­risk­ing chan­nel funds un­der­ground.

“It scares those who wish to come to the Caribbean to do busi­ness. Be­cause it por­trays our coun­tries as places that are not safe, es­pe­cially when one looks at data se­cu­rity and client con­fi­den­tial­ity,” said Bazard via video link in an ad­dress to the 5th an­nual Anti-Money Laun­der­ing/Counter-Fi­nanc­ing of Ter­ror­ism con­fer­ence held in Kingston.

“We are un­der at­tack for the hack­ing of our in­for­ma­tion,” she said.

The Panama Papers led to rev­e­la­tions that some world lead­ers held undis­closed offshore ac­counts. While such ac­counts may be legally per­mis­si­ble, they were deemed prob­lem­atic in some ju­ris­dic­tions. The in­for­ma­tion con­tained in the leak led to the res­ig­na­tion of Sig­mundur David Gunnlaugs­son, Ice­land’s prime min­is­ter, for ex­am­ple.

“On all of th­ese leaked data there is no ev­i­dence of il­le­gal­ity,” said Bazard. “Tax avoid­ance is le­gal but tax eva­sion is il­le­gal. But there is a ten­dency to blur the two by those who ad­vo­cate against low tax or no tax ju­ris­dic­tions claim­ing there are tax havens,” she charged.

The Ba­hamas leak was de­vel­oped into a free data­base of di­rec­tors and share­hold­ers of offshore com­pa­nies set up in Ba­hamas. It would ob­vi­ate the “US$10 search” charge to re­trieve the data from the Ba­hamian govern­ment, said Bazard.

“There was noth­ing here in this leak, just an­other piece of sen­sa­tional jour­nal­ism,” she added.

The leaked data was made avail­able to the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists, a US-based group with a global net­work of more than 190 in­ves­tiga­tive jour­nal­ists in more than 65 coun­tries. Bazard said the un­told fall­out from the leaks was not the politi­cians based in Europe but rather the re­gional economies and lives of the pro­fes­sion­als work­ing in th­ese sec­tors.

“The fall­out from Panama Papers as it af­fects ev­ery Caribbean coun­try and ev­ery fi­nan­cial cen­tre is that we go back on some list,” stated Bazard, who up to re­cently held the po­si­tion of di­rec­tor of com­pli­ance at Sco­tia­bank Ba­hamas.


De­risk­ing has been af­fect­ing Ja­maica for at least five years. Since 2011, the for­mer RBC Ja­maica re­port­edly cut ties with lo­cal money-ser­vices busi­nesses cit­ing pres­sure from its over­seas cor­re­spon­dent banks. Then in 2014 Na­tional Com­mer­cial Bank of Ja­maica fol­lowed suit for sim­i­lar rea­sons.

Other Caribbean coun­tries also face the same pres­sures.

For cus­tomers, th­ese man­i­fest in the form of the ter­mi­nated credit cards ser­vices or the clo­sure of money-ser­vice op­er­a­tions across the re­gion.

“The Caribbean needs to band to­gether and have a united voice,” said Bazard, adding that the clo­sure of cor­re­spon­dent bank ac­counts for money ser­vices is di­rect­ing funds to un­reg­u­lated spaces.

Six­teen years ago, the world’s most pow­er­ful bankers met in Wolfs­berg, Switzer­land, to for­mu­late rules to deal with cor­rup­tion and money laun­der­ing. They be­came known as the Wolfs­berg Group.

Since the pub­li­ca­tion of The Wolfs­berg Anti-Money Laun­der­ing Prin­ci­ples for Pri­vate Bank­ing in Oc­to­ber 2000, a se­ries of rules gov­ern­ing global bank­ing con­tin­ues to evolve. In­dus­tries such as money ser­vices, dig­i­tal cur­rency providers, char­i­ties/non­prof­its and real es­tate agents re­main un­der the spotlight.

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