Government of Belize Pushes Financial Legislation Amendments to Avoid Blacklisting
The House of Representatives will meet on May nineteenth. As the Government of Belize seeks to bring its financial legislations up to par with international standards, Friday will see the continuation of debates on a suite of amendments. We have been reporting on the Caribbean Financial Advisory Taskforce Mutual Evaluation Exercise for the past several weeks, as the Briceno administration works to meet its end of June deadline. News Five’s Paul Lopez takes a closer look at the exercise and its importance to Belize’s financial sector. Here is that report.
Paul Lopez, Reporting
Approximately ten financial legislation amendment bills have been brought before the National Assembly over the last eight weeks. The Briceño administration has been pushing these amendments through parliament to avoid a repeat of the 2013 de-risking nightmare. The Caribbean Financial Action Task Force is leading the charge to ensure that Belize’s financial sector complies with international standards. The Belize Anti-Money Laundering Committee is the body responsible for providing the recommended reforms to satisfy international standards. Leni Ysaguirre-McGann is the Director at the Financial Intelligence Unit and a member of the committee.
Leni Ysaguirre-McGann
Leni Ysaguirre-McGann, Director, F.I.U. [File: April 24th, 2023]
“It is the fourth round, which really means it is the fourth time we are being assessed by the Caribbean Financial Action Task Force which also means there will be a fifth, because it is a process that repeats itself. There is a particular focus which each assessment. So, in the third round there was a lot of emphasis on whether you have laws and systems in place. The third round was meant to prepare us for the fourth round, where they would also be looking at laws and systems because we acknowledge that these things do evolve is changed and reform. Therefore we have identified areas in our laws and framework that needs strengthening.”
The end goal is a robust financial system working in tandem with international monetary agencies to combat the financing of terrorism, as well as the proliferation of weapons of mass destruction. In 2013, Belize suffered an international black eye after failing to address deficiencies in its laws. Its financial sector was blacklisted by the Caribbean Financial Action Task Force. At the time, former Prime Minister Dean Barrow did not take kindly to the decision.
Dean Barrow
Dean Barrow, Former Prime Minister [File: November 29th, 2013]
“The big countries are hypocrites. They don’t practice what they preach. They tell you what you have to do, they talk about harmful tax completion, they talk about his, and they talk about that. They talk about knock off counterfeit goods, weh the place name dah New York, Canal Street, China Town? The point is, in passing the legislation that we did, we had to try to stare a careful course. We recognize that these big countries and there proxies, their agencies are powerful and can collapse our system. We can complain, we can denounce them but the fact is that ultimately we have to recognize where the power lied.”
To put things into context, according to an economic impact study done by the United Nations, at the height of de-risking, three domestic banks lost ninety percent of their corresponding banking relations between 2015 and 2016. As a result, customers faced unprecedented challenges in carrying out U.S. dollar transactions. Customers were paying almost double the amount to do business. Many importers and exporters were unable to execute transactions from Belize. With the exception of one institution, Central Bank and all other commercial banks were unable to provide U.S. dollar check clearing services. Prime Minister John Briceño is now attempting to avoid the same fate, in this fourth round of CFATF’s mutual evaluation exercise.
John Briceño
Prime Minister John Briceño [File: April 21st, 2023]
“Here again you have a clear example as to why we said the U.D.P. administration was incompetent. Well, either they were incompetent or they just did not have the capacity to get this important work done. What was the result of their incompetence? The result was that this was part of the reason why we lost eighty percent of our corresponding banking relationships. Sound technical compliance with the FTAF recommendations is critical for the continued, smooth functioning of Belize commerce and economic activity with our partners in the international financial system.”
The possibility of further de-risking looms, in the event the current administration fails to address the legislative deficiencies identified. Nonetheless, McGann says Belize is on pace to meet its obligations.
Leni Ysaguirre-McGann [File: April 24th, 2023]
“I can tell you it is forty recommendations each with different criterion we have to look at and each criterion has different aspects so the analysis is really meticulous and detailed and it has to be robust to ensure we are complying. That is part of the reason why we are where we are now. Notwithstanding, I don’t think that should deter us in trying to meet our objectives and trying to meet the different milestones along this evaluation process.”
Reporting for News Five, I am Paul Lopez.
