Public Accounts Committee members say recent changes to the law that enables the Government of Belize to engage in foreign exchange dealings without the Central Bank’s approval is a recipe for corruption, but Prime Minister Dean Barrow says that’s not the case.
PAC Chairman Hon. Julius Espat issued a press release Thursday in which he stated that the “carte blanche” nature of the change to Statutory Instrument No. 63 of 2013—which relate to the Exchange Control (Amendment) Regulations ACT—empowers any ministry or government department “to open and operate a bank account in any currency, or for conducting any transactions in relation to any securities or otherwise, or for any other dealings in foreign currency, without the knowledge or consent of the Central Bank of Belize.”
Espat stressed that this new move could potentially lead to abuse and corruption by public officials. It could also expose Belize’s foreign reserve position to unnecessary risks.
Speaking to the Reporter Thursday evening, Expat also explained that he is equally concerned that none of the fourteen People’s United Party representatives in the National Assembly were aware of this change. “I found out about it through members of the business sector,” Espat explained.
Initially, the law—as it pertained to its applicability to the “Crown”—stated: “These Regulations shall bind the Crown and shall apply to transactions by a Government department or other person acting on behalf of the Crown, and the Central Bank shall not, by virtue of any contract made by them or on their behalf in relation to any securities, be under any obligation to grant any permission under Part III of these Regulations or any exemption from the provisions of the said Part III.”
However, the amendment, which the Prime Minister signed into law on June 20, 2013, states: “Nothing in these Regulations shall apply to the Government of Belize and no permission, permit or approval of the Central Bank or any other authority shall be required by or on behalf of the Government of Belize for opening and operating a bank account in any currency, or for conducting any transactions in relation to any securities or otherwise, or for any other dealings in foreign currency. … In these Regulations, ‘Government of Belize’ includes any Ministry or Department of Government of Belize.’”
PM Barrow, however, disagreed with Espat’s concerns, and explained that the change became necessary due to the recent take over of the two registries that were once operated by Belize International Services Limited: the International Merchant Marine Registry of Belize (IMMARBE) and International Business Companies Registries (IBC).
He explained that obviously the money exchanges shall no longer involve BISL; the government has now taken over those responsibilities and, therefore, it must be able—by law—to engage in such exchanges.
Barrow, in response to Espat’s concerns, said that the foreign currency obtained via any IMMARBE-IBC transaction will still be given to the Central Bank, because it’s there the government would need to trade-in any foreign currency to obtain local dollars to use to conduct the government’s business.
“Any concerns of the PUP are absolute nonsense,” Barrow said, “because all regulations are still in place to govern GoB’s handling of money.”
These laws include the Stores Orders and the Contractor-General Act. The operations, Barrow added, are also subject to the scrutiny of the Auditor General’s Office.
Espat told the Reporter that there might be some logical justification for the amendment as it relates to the IMMARBE-IBC rationale. However, Espat explained, there are still questions as to why all “ministries and government departments” needed to be included.
“How can he [Barrrow] ensure that he prevents all ministries from engaging in any and every wrong doing?” Espat asked.
He said that the issue comes down to a matter of confidence and if GoB had allowed the Public Accounts Committee to function properly there may have been less apprenhension regarding this latest amendment.