BATT: TT banks already blacklisted abroad

The Bankers’ Association (BATT) has confirmed the Attorney General’s assertion that local banks have started to lose correspondent international partnerships because of the country’s failure to comply with multi-lateral tax regulations.

BATT president, Nigel Baptiste, said he was aware of one bank that has lost two correspondent banking relationships, but because of other relationships, clients have not felt any impact. There is also a provincial bank in China and another in Mexico that have applied due diligence measures that have “significantly slowed the business of transaction of the various clients.”

“There is no denying that all of the local banks have been facing increased due diligence from our correspondent banks so I can endorse the AG’s comments,” Baptiste told Newsday in an email. The pressure is most definitely there, he said, noting that BATT has released its own statement emphasising the importance of passing this legislation. “It is not the sum total of what needs to be done but it is a step in the right direction,” he said.

Even though TT has signed on to several international tax conventions, including the Global Forum on Transparency and Exchange of Information for tax purposes and the Financial Action Task Force (FATF), the country’s lack of compliant legislation, including permitting the Board of Inland Revenue to share certain personal information with banks and local law enforcement to combat money laundering, tax evasion and terrorist financing. The country has until the end of November to pass the first compliant legislation, amendments to the Income Tax Act, or potentially face international backlash if foreign banks refuse to do business with local counterparts (also known as de-risking). So far the bill is in limbo in the Lower House of Parliament because the Opposition refuses to support it, citing concerns for individual privacy.

Domestic banks have been doing everything within their power to assuage the concerns of foreign correspondents, Baptiste said. “We have tightened up on our procedures, sometimes to the detriment of our customer relationships, but we understand the importance of compliance with international standards, especially standards that need to be satisfied for participation in the international payments system. I don’t know if we will be cut off immediately at the end of the month but anything is possible. Our correspondents understand to some extent the dilemma that the domestic banks are in but they can only go so far without falling foul of their own guidelines,” he said.

If the Global Forum, the European Union and the FATF call for their members to take countervailing measures against TT then banks will not be afforded any more leeway, he said

“We have spoken about the consequences before and the consequences are that we will lose correspondent banking relationships, which will disrupt the lives of all citizens of this country (directly and indirectly). This bill needs to be passed urgently.”