The chairman of the Caribbean Community (CARICOM), Prime Minister Dr Timothy Harris says one the biggest economic and financial challenges facing the 15-member grouping is the practice engaged by the large global commercial banks to terminate their corresponding banking services.
Harris, speaking at the National Press Club here, said that the global commercial banks were also offering their services at “unconscionable high rates.”
“The practice has a harmful effect on the flow of remittances from those living and working abroad to their loved ones and business associates at home who rely on this source of funds to provide for their sustenance.
“The practice has a harmful effect on commercial trading activity that disrupts the flow of payments for services rendered. What was once an overnight bank-wire transfer of funds from the US is now taking as many as three months, or more, for delivery,” said Harris, who earlier participated in a two-day Caribbean Central Bank forum organised by the World Bank Group on the digital economy in the Eastern Caribbean.
Harris, who is prime minister of St Kitts-Nevis, told the journalists that the “very damaging practice” by the global commercial banks “has the perverse effect of channelling many of these transactions to an underground black market through unscrupulous carriers with no certainty or guarantee of delivery.
“This is particularly harmful to small island developing states such as St. Kitts and Nevis with a large overseas population in the Diaspora. The large banks claim that they are seeking to minimise the risks associated with money laundering and terrorist financing to which they are subject to heavy fines for violating Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) regulatory guidelines.”
But he said that the reality is that there is no evidence of significant money laundering activity in St Kitts and Nevis.