KEY ASPECTS of banking continue to be a challenge for a number of international business companies operating in Barbados.
Chair of the Barbados International Business Association’s (BIBA) banking committee, Gregory McConnie, reported that not only have these entities faced hurdles related to anti-money laundering and know your customer due diligence requirements (AML/KYC), but changes to correspondent/clearing banking relationships were also a concern.
McConnie, who is an executive with Brookfield International Bank in Barbados, highlighted the concerns while giving his report committee’s report for 2014/2015.
He said during the year the committee “focused its efforts on issues related to…AML/KYC…being experienced by some members in respect of their local commercial banking relationships, as well as changes seen internationally in the approach to correspondent/clearing banking by many of the corresponding/clearing banks based in the [United States]”.
“Some members have experienced a number of challenges in dealing with the local commercial banks regarding their AML/KYC requirements where in some cases requests for AML/KYC documentation were received with very short response deadlines resulting in some accounts being suspended or even closed,” he said, noting that there had been discussions with the Barbados Bankers’ Association (BBA) on the issue.
McConnie said “the committee and the BBA continue to engage in dialogue on how best to face the challenges posed by enhanced KYC requirements”.
In terms of issues related to correspondent/clearing banks, he pointed out that “in the face of multi-billion dollar fines levied on a number of global banks in respect of their alleged roles in the perpetuation of money laundering, terrorist financing and tax evasion, most of the global banks providing correspondent/clearing services have been reassessing the risks posed in the jurisdictions where they offer services”.
“Unfortunately, Barbados has been included…as a perceived higher risk jurisdiction and in addition to the increased efforts needed to manage correspondent/clearing services relations [this] has seen some wealth management operations close their business here,” he said.
