Slot machine operators here are having a cash problem – too much of it and nowhere to deposit it.
Attorney General Adriel Brathwaite today disclosed that commercial banks are refusing to accept large amounts of cash from these businesses because of the labelling of Barbados as a money laundering haven.
Brathwaite said the intake at these businesses was being classified as the proceeds of gambling.
“These are legitimate businesses but someone sits outside of the region and makes a decision that ‘this is gambling, therefore we are not touching it’. So you have as I saw a couple days ago, a legitimate business sent me a note on WhatsApp with lots of cash on a table saying, ‘AG help me, we don’t know what to do with this; our bank account has been deactivated and we are paying our staff with cash’, and they can’t operate like that,” Brathwaite said this morning at the opening ceremony of a three-day anti-money laundering workshop at the Radisson Aquatica Hotel.
It has become increasingly common for large banks and other financial institutions to restrict or terminate relationships with categories of customers they believe pose a high risk of money laundering, terrorist financing or other forms of crime, according to the Financial Action Task Force (FATF), the inter-governmental body which promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
This has become a severe problem in correspondent banking where global banks have been closing down relationships with many of their respondent banks, especially in emerging economies, partly for commercial reasons, but mainly because these smaller banks cannot always meet today’s higher financial crime standards, the FATF said.
In addition, commercial banks are also mandated to consider whether or not their clients operate in, or are subjected to, a regulatory environment, which is internationally recognized as adequate in the fight against money laundering.
Brathwaite said it was unfair to paint everyone with the broad money laundering brush, while restricting people from making a living legitimately.
“If you take away ability to function and to function legally, then what else will we do as a region? The criminal element will take over. We have gone back to days where suitcases of cash are being moved around because people cannot bank legitimately.
“Here in Barbados we have the issue of our slot machine operators, these businesses have been around for 30 years and employing hundreds of persons and waking up one day and being told that we cannot bank with you anymore,” he lamented.
In a 2016 report by the US State Department, Barbados was named among a number of countries which Washington regarded as major money laundering havens.
Braithwaite last month dismissed that report as misleading, stating it was not supported by the intelligence.
“Criminal activity in Barbados is immaterial as far as the international community is concerned. Funds, which may be laundered in Barbados, are minuscule when measured on the scale of international laundering. Barbados is not a world financial centre and, therefore, any larger than usual financial transaction which takes place here will receive immediate attention, both here and abroad. Large-scale launderers know that the place to hide a tree is in the forest. Barbados does not fit that bill,” he stressed at the time.