Prime Minister Allen Chastanet has told CARICOM Heads of government that the region has moved the needle on de-risking.
“I can report that we have moved the needle on de-risking and that the OECS is working on a single compliance department,” Chastanet stated.
The outgoing Chairman of the Caribbean Community was addressing the 31st Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community on 18th February 2020
The Saint Lucia leader recalled that when he took over the chairmanship at the 40th meeting of the Conference of Heads in Saint Lucia in July 2019, he identified some of the areas that were troubling “to all of us”.
He noted that at the time the list included climate change, blacklisting by the EU, the adversities facing small island states in the international community, the ongoing situation in Venezuela and the withdrawal of correspondent banking services from the region.
Chastanet observed that unfortunately, none of these issues have gone away.
He asserted that it will be up to the incoming Chairman, Prime Minister Mia Mottley of Barbados, to continue to lobby on CARICOM’s behalf because in most cases, the urgency is even greater.
Chastanet told CARICOM leaders that in November last year as a direct result of a Saint Lucia meeting, a delegation from the Community led by the distinguished Prime Minister of Antigua and Barbuda took the issue of correspondent banking and de-risking to Washington in light of the threat of the region’s financial institutions losing critical relationships with US banks.
It was in that context he reported that the needle on de-risking has moved.
“We were able to draw the attention of the members of the Financial Services Committee of the United States’ Congress and senior representatives of major US banks, including Bank of America, to the catastrophic effect which the stringent measures being imposed on domestic banks by correspondent banks in the United States and the negative impact which the withdrawal of such services was having on economies in CARICOM Member States,” Chastanet stated.
“Our own information indicates that up to the middle of 2018, 25% of the 50 banks operating across CARICOM had reported termination of correspondent banking services, while 75% reported they were facing certain correspondent banking restrictions,” he told the CARICOM meeting.
“Other negative consequences have been an increase in operational costs, an extension in the processing time for international payments, as well as increased difficulty in account opening or securing banking services,” Chastanet stated.
He observed that another CARICOM delegation interfaced with the European Union on the troubling issue of black listing, which continues to this day.
“Member States of the Community, however, continue to take the necessary steps to comply with the demands of the regulating agencies, but while they do, countries in our region are still being penalized. Some of us remain on the grey list, while only one Member State remains on the blacklist. We must continue working until all of us are off the list, but more importantly, we must make every effort to ensure this undemocratic and discriminatory practice of a public blacklist is discontinued,” Chastanet asserted.