#BTColumn – Blacklisting the Caribbean

Disclaimer: The views and opinions expressed by this author are their own and do not represent the official position of the Barbados Today.

by Hallam Hope

As the saying goes: “Do the crime. Do the time.” That’s the practice in the Caribbean.

For international banks, doing the crime, be it money laundering and flaunting the regulation of the illegal drugs trade or some gross financial misconduct, means paying the fine. This fine could be as much as a billion US dollars, the amount J.P. Morgan Chase was hit with recently
for market manipulation.

An international organisation of investigative journalists received leaked documents and reports appeared around September 22 last month, which alleged five of the world’s largest banks permitted two trillion dollars worth of suspicious or fraudulent activity to take place, including money laundering for criminal gangs and terrorists.

European names mentioned were HSBC and Deutsche Bank. These are long established financial institutions which are supposedly regulated under the standards and rules of the Financial Action Task Force (FATF).

The Caribbean, my research suggests, accounts for a teardrop of the total amount of global money laundering and cybercrime. Yet the European Union, which has failed to prosecute anything but a fraction of its cyber criminals or make examples by hauling their principals off to jail is blacklisting small Caribbean countries such as Trinidad and Tobago, The Bahamas, Barbados and tiny Anguilla with unjustified and unsubstantiated allegations
of financial wrongdoing.

The allegations and economic pressure, tantamount to financial warfare, is costing Barbados more than US$300, 000 in funds it cannot afford to spend with consultants at a time when the island is facing its worst social disruption due to the COVID-19 pandemic.

To preserve the health of the nation it has had to divert huge sums of money and accumulate even more debt, which is debt carried by its citizens.

Now it and other Caribbean Community (CARICOM) sister countries are assailed by allegations that tarnish their images of relatively clean investment competitors to the same European countries that cast suspicion on their commitment to arrest financial criminals.

Says the European Union: “These countries are identified as having strategic deficiencies in their national anti-money laundering and counter-financing of terrorism regimes that pose significant threats to the EU’s financial system.”

Untrue, untrue, untrue. Not a shred of supporting evidence, because none exists.

A CARICOM statement reflecting the 15 nations paints a totally different picture of unjustified allegations and an absence of meaningful dialogue prior to the blacklisting announcements.

Tax incentives offer a carrot for international corporations to invest in the Caribbean. Portugal offers a free zone and tax incentives to attract investment in crypto currency and Blockchain firms.

Several European Union members are competing among themselves to do the same.

Barbados was told it has to align its taxation levels for local firms and international firms.

Are European countries required to comply similarly, and is this bullying of Caribbean countries tantamount to trade and investment discrimination? In either event, it would appear CARICOM and individual countries need to develop a sustainable strategy on blacklisting, which shows no signs of going away.

I have some ideas.

Hallam Hope is a longstanding student of technology regulation and policy.