By Alexis R. Milan
The Governor of the Central Bank, Glen Ysaguirre told the Reporter he has not received confirmation from either of two local banks reportedly cut off by International banking associates.
Unconfirmed reports say that both banks had their corresponding banking relations abroad severed, in a move similar to what the Belize Bank encountered several months ago.
Financial Secretary Joseph Waight said he was unaware of the situation and suggested that normally the Central Bank would be the first to know.
Reports are that the banks are trying to keep the matter under the radar, until they can have the issue resolved.
The severing of corresponding banking relations affect international money transactions. When Belize Bank had their corresponding ties with Bank of America, clients were unable to wire money to the United States (US) and had to either use another bank or go through the Central Bank as a medium.
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 terminated. 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 does not make its way into legitimate accounts, and also to ensure that citizens of those jurisdictions do not evade taxes.
Reports to The Reporter also indicate that Belize’s offshore financial sector, which has attracted plenty of business from foreign nationals in recent years, may also be in danger of closing down. Belize has been included on many US and European lists, along with other Caribbean nations, as a tax haven.
In June, the Prime Minister responded to the a recent European Union (EU) blacklisting, saying international players have been trying for a while to close in on smaller jurisdictions offering offshore services, and said the latest blacklisting is just a continuation of the actions they have been taking. He also noted that their list didn’t include other European nations that have been well-known for offshore services associated with tax-evasion.
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 any such eventuality.
Earlier this year at the Summit of the Americas in Panama, leaders from several Caribbean nations complained to US President Barack Obama about what they consider were unfair black-listings against them. Obama, during the summit, had promised to have a review of the policy done and to see to what extent they could help to ameliorate the situation and its negative impact on the region.