Home' Trinidad and Tobago Guardian : December 11th 2014 Contents DECEMBER 2014 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
Chief editor-business: ANTHONY WILSON
Editing and design: NATASHA SAIDWAN
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In his monetary policy announcement presentation in
Chaguanas two Monday's ago, Central Bank Governor
Jwala Rambarran described foreign exchange as "another
murky matter that has grabbed headlines for most of
The Governor said that foreign exchange had been turned
into a murky matter by some with agendas and others who
pretend to be ignorant about how our system works
He pointed out that the demand for foreign exchange has
expanded and changed over the last two decades with "new
patterns of consumer spending" for example the use of credit
cards to make online payments.
And he noted that foreign credit card purchases had
"devoured" US$570 million for the first 11 months of the year,
the acquisition of new cars "many of which are higher-end
luxury vehicles has accounted for US$205 million for the year
so far and that there was US$3.3 billion in foreign exchange
The Central Bank leader also spoke about the "legitimate
requests" of businesses that the institution has met by taking
US$1.7 billion from the country's reserves.
Having set the background, the governor then said that that
the foreign exchange story gets even murkier because "there
are many business leaders who often give their opinions freely
on foreign exchange, many go to the media and have been
extremely vocal on the matter."
In what was the really important aspect of his speech on
this issue, Mr Rambarran then said: "We have noticed a trend
where businesses make noise for foreign exchange to pay bills
for trade-relate purposes and actively lobby the authorized
dealers and Central Bank for US dollars.
"When the money is provided, the funds are promptly
deposited in their foreign exchange accounts and left unused
and the noises about not being able to get money for business
"I do have one tip for businesses trying to get foreign
exchange: it helps if you don't conduct business with companies
with terrorist links as we have strict laws on Anti-Money
Laundering and Combatting the Financing of Terrorism."
Now, Governor Rambarran's statements raise several impor-
• The pointed reference to the fact that the Central Bank
has "noticed a trend" seems to suggest that this is a pattern
of behaviour that the institution has observed for some time
and that is becoming more commonplace;
• That the Central Bank has observed a correlation between
some of the businessmen who complain about the unavailability
of foreign exchange and those who are buying foreign exchange
and depositing it into their foreign exchange accounts,
• The suggestion that some businesspeople are being dis-
honest in applying for foreign exchange to pay bills and then
depositing the money into a foreign exchange account;
• The absolutely intriguing suggestion that some of the
people who are parking their funds in this manner may be
conducting (or attempting to conduct) business with companies
that have terrorist links.
One must assume that a Central Bank Governor would not
have raised the issue of local companies attempting to do
business with foreign companies that have "terrorist links"
unless he had cogent and compelling evidence that such prac-
tices are taking place.
If this is in fact the case, one imagines that some commu-
nication has taken place with the officials at the Financial
Intelligence Unit, especially that institution's head Susan Fran-
If Mr Rambarran were in fact just providing his audience
of Chaguanas businesspeople with some friendly advice, why
would he have placed this "tip" right after his reference to
businesspeople parking foreign exchange in their foreign
The absolutely pertinent question that the Governor may
choose to answer is whether he has a list of companies or
persons who are getting foreign exchange and promptly deposit-
ing it into their foreign exchange accounts?
If Mr Rambarran is suggesting that these businessmen are
doing something illegal, unethical or immoral, then how does
he propose to use the considerable resources at his disposal
to address or reverse this situation?
Or is he simply expressing his disapproval of the fact that
those who are making the most noise about the lack of foreign
exchange are not using the money for the purpose stated in
The Governor is quite right that T&T has strict anti-money
laundering and terrorist financing laws.
What he did not say is that the Central Bank has a respon-
sibility to ensure that all of the financial institutions it supervises
comply with anti-money laundering requirements.
On the Central Bank's website is this statement: "The Finan-
cial Obligations Regulations 2010 (the FOR) names the Central
Bank of Trinidad and Tobago (the Central Bank) as a Supervisory
Authority for the financial institutions that it regulates.
"As such, the Central Bank is responsible for ensuring that
licensed institutions under the Financial Institutions Act 2008,
registrants under the Insurance Act Chap 84:01, the Home
Mortgage Bank, bureaux de change, and money remittance
businesses comply with Anti-Money Laundering (AML) and
Counter Terrorist Financing (CTF) legislative and regulatory
"In addition, as part of its regulatory function, the Central
Bank issues Guidelines and Circular letters which provide
guidance to the industry in respect of anti-money laundering
and counter terrorist financing on processes, systems and
other practices to ensure compliance with the legislation."
The anti-money laundering guideline published by the
Central Bank in October 2011 notes that the Proceeds of Crime
Act requires financial institutions to "pay attention to and
report if suspicious, business transactions which are large,
unusual, complex as well as transactions which have no apparent
economic or visible lawful purpose, those undertaken with
persons and transactions with financial institutions in or from
other countries which do not or insufficiently comply with
the recommendations of the Financial Action Task Force.
So local financial institutions have a responsibility to report
all suspicious activities to Financial Intelligence Unit and the
Central Bank has a responsibility to ensure that all financial
institutions are compliant.
It is also clear that T&T is under some pressure from the
international community to ensure that its anti-money laun-
dering efforts result in some prosecutions.
The tenth follow-up report on T&T of the Caribbean Financial
Action Taskforce, published in May this year, stated: "With
regard to Recommendation 1, the only outstanding deficiency
is the fact that the implementation of the money laundering
legislation does not appear to be effective as there have been
"The authorities have advised that measures are being con-
sidered to address problems in the effectiveness of the criminal
justice system. These measures include legislation to abolish
preliminary enquiries in indictable offences. Efforts are being
made to increase the number of judicial officers and there is
a move towards the increasing use of plea bargaining. Such
measures should enhance the speed and efficiency of criminal
trials. Nevertheless, the situation has remained unchanged
therefore resulting in this recommendation not being fully
Is the Governor
checking his list twice?
Central Bank Governor Jwala Rambarran
Susan Francois, Director of Financial Intelligence Unit
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