Bankers: FATF more pressing than FATCA

“We need to get to a point where again we are demonstrating that we are taking these things seriously,” Bankers Association of Trinidad and Tobago President Anya Schnoor told Newsday yesterday.

Trinidad is not abiding by some of the things “we said we were going to do,” she said, including prosecuting people for money laundering and regulation of the gaming industry.

The country had only recently been removed from the FATF grey list and now after the organisation’s last assessment in June, it faces the risk of being added back for inadequate compliance with global AML/TF standards. TT has until next May to prove it has made some serious strides in applying counter measures.

“This is 2016. Not one person has been charged, convicted and put in prison for money laundering in Trinidad and Tobago.

That is amazing. In no other country in the world you would have that situation,” Schnoor said.

It shows an inherent weakness in all the stages of us complying with our money laundering laws, she added.

Banks are doing their part in reporting suspicious transactions, she said, but “we’re not the police.” “We submit thousands of reports to the Financial Intelligence Unit, but they also don’t have policing authority,” she said.

From January 1 to June 30, the FIU received $630.8 million in suspicious transaction reports from banks.

The FIU sends its information to police but what happens after? Schnoor asked.

“What do the police do with that information from the FIU? We don’t know. The banks are sending the information as required.

In fact we hear a lot of complaints from customers that we ask a lot of questions (about source of funds). That’s because we’re doing the right things and following the right laws but we aren’t the police or the investigating arms.

We can only submit the information we have.

It’s for the authorities to make sure they are equipped to make sure they have all that is needed,” she said.

TT doesn’t have to reinvent the wheel, she said, just look at legislation around the world and use the best of that to set up infrastructure here.

Group Chief Executive Officer of First Citizens Bank Karen Darbasie made a similar point during a panel discussion on Wednesday at the Institute of Chartered Accountants of Trinidad and Tobago’s (ICATT) annual conference. “If we don’t get a passing grade from the FATF then there are issues that could arise from the derisking of Trinidad’s financial sector and international corresponding banks. Similar to what we’d face with FATCA but more extensive. In fact a lot of the issues that have happened within the derisking environment within the broader Caribbean space has been associated with lack of compliance with AML legislation,” Darbasie said.

Derisking is a banking practice where financial institutions exit relationships and close the accounts of clients who are perceived as “high risk”. Instead of managing these risky clients, financial institutions would rather end the relationship altogether and consequently minimise their own risk — at the expense of their clients who will now be unable to do banking transactions.

“Derisking is as important or even more important an issue as FATCA. The fact is we have to get the FATF review and all of their recommendations for the country under control,” Darbasie added.