US AML and CFT compliance creating increasing difficulties in the Caribbean

Increasingly tough anti-money laundering and counter financing of terrorism (AML/CFT) measures required of US financial institutions is creating significant difficulties for banks across the Caribbean.

The difficulties are caused by US banks ‘de-risking’, essentially ending correspondent and other banking relationships because they perceive rewards from doing business with banks in less developed markets are not commensurate with the risks of financial penalties for breaching AML/CFT requirements.

Wide impact

In Belize, the central bank has had to take over processing international business payments after US financial institutions terminated relationships with most of the country’s commercial banks.

Reports from Jamaica say that US bank account holders are being told to open accounts elsewhere.

According to St. Lucia’s prime minister Allen Chastanet, who described the situation as “ridiculous”, some states have been chartering planes to fly cash.

Venezuela

Earlier this month Citigroup said it plans to discontinue some banking operations in Venezuela, a move the country’s president, Nicolas Maduro, described as a “financial blockade.”

The US-based bank has decided to stop correspondent banking and servicing some accounts in the country.



Categories: Trade Based Financial crimes News