Belizean banks targeted Is the Central Bank next?

By Alexis R. Milan
Staff Reporter

Atlantic International Bank Limited (AIBL), an offshore institution not affiliated with Atlantic Bank Limited, has confirmed reports that more financial institutions in Belize had corresponding banking ties with Bank of America (BOA) cut off.
This week the AIBL put out a notice to its customers that their corresponding bank account with BOA would be closed as of Friday and as a consequence, banking services such as wire transfers, USD bank drafts and foreign currency exchange would be unavailable until further notice.

According to AIBL, in the next few days, the bank will inform customers what options are available for the movement of incoming and outgoing wires. “We are working on several options at the moment and we are very confident that we will have both a temporary and permanent solution to the correspondent banking issue very shortly,” AIBL said in its statement.
The Reporter broke the story last week and has made several attempts to contact Central Bank Governor Glenford Ysaguirre for a comment and for confirmation that at least one other financial institution faces the same fate. Ysaguirre, we were told, has been engaged in a series of meetings this week, perhaps to address this same issue.

Last Thursday Ysaguirre did communicate to The Reporter that he was not aware of the situation and had not received any confirmation that corresponding ties to other financial institutions in the country had been severed.

The Belize Bank was the first to have its corresponding ties cut, as a part of international financial institutions “de-risking” measures. After the Belize Bank was cut, clients were unable to wire money to the US and the Central Bank provided “nesting” services by offering its own corresponding services, so clients would still be able to wire money at will.

Since then, banking insiders have told The Reporter that the Central Bank’s offer can have adverse effects on Belize. While the US legislation governing these institutions has reinforced due diligence measures, it has granted exceptions to foreign Central Banks. But in the face of the assistance offered by Belize’s Central Bank, the financial community fears it too will be targeted. The concern is that BOA could exercise discretion and terminate its correspondent relationship with the Central Bank of Belize, which would leave the Government of Belize and the other banks without access to the US financial system until they can secure the services of another bank in the US.

Prime Minister Dean Barrow had met with Bank of America officials in April and at the time, said he was assured that no other banks in Belize, onshore or offshore, would have their corresponding ties severed. As it was explained to him, Bank of America was simply de-risking, a consequence of increased pressure on financial institutions in America and Europe to ensure that proceeds from money laundering do not make their way into legitimate accounts, and also to ensure that citizens of those jurisdictions do not evade taxes.

In June, the Prime Minister also responded to a European Union (EU) blacklisting, saying international players have been trying for a while to close in on smaller jurisdictions offering offshore services. He said the latest blacklisting is just a continuation of the actions they have been taking. He also cryptically added that he has no doubt that sooner or later they would succeed in closing down smaller offshore sectors, but said he wouldn’t be surprised to see it happen. He did add that Belize has been preparing for some time for any such eventuality.

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