Howai warns banks to be careful

At a conference last week that explored global money laundering at the Arthur Lok Jack Graduate School of Business in Mt Hope last week, Central Bank Governor Ewart Williams took the view that money laundering was part of the financial landscape.

"Somebody is financing this," he said of the money laundering activities.

The theme of the conference was, "Regulating the Financial Sector," and was hosted in collaboration with Citibank in Trinidad.

Williams said it was possible that there was money laundering taking place in TT, given the reported size of the nation’s underground economy and recent drug busts by the authorities.

Security Exchange Commission boss Osborne Nurse, in an interview after, said it was quite possible that money laundering was taking place in stocks and bonds.

"It is a distinct possibility that funds are being chanelled in these sectors of the economy," he said.

While indicating that it was clear that someone was financing such illegal activities and the dirty money involved must come through the financial system at some stage, Williams said the Central Bank has strengthened its anti-money laundering guidelines.

These, he said, were consistent with international guidelines set down by the Financial Action Task Force in line with those set out by the UN.

The enhanced guidelines have expanded the money laundering definition previously associated with the illegal drug trade, to include terrorist financing which has emerged as a new form of money laundering since the September 11, 2001 terrorist attacks in the US.

In a telephone interview, Howai was asked about Williams’ view on money laundering and what impact it was having on the economy.

He said local commercial banks agree with Williams’ view about the serious threat which money laundering poses to the national economy, if it is left unchecked. Given the large number of business transactions occurring on a daily basis between TT and US companies and the large number of US investments in this country, Howai said local banks have to be on top of the game since the Sarbanes Oxley and Patriot Acts in the US.

Under these pieces of legislation, Howai said TT banks could be found liable if US authorities believe they are engaging with commercial entities in other nations whose operations seem to be questionable.

He said this was why banks reported all transactions over a $40,000 value to the Central Bank and the Financial Intelligence Unit of the Ministry of National Security for review.

Howai said such transactions do not imply that the person involved is laundering money but it is necessary to exercise precautions in such matters given the obvious risks in not doing so.

"It’s everybody’s business," he stated.

Howai added that he believed the anti-money laundering guidelines set in place by the Central Bank are "up to mark" in dealing with the situation.

He also indicated that the Association has established an inter-bank committee which meets with the Central Bank on a regular basis to address a variety of issues, including money laundering.