Wednesday, March 9, 2016


If you diligently reviewed this year's International Narcotics Control Strategy Report, published annually by the US State Department, you know that the Caribbean tax haven countries continue to pose a major money laundering threat. For that reason, and due to their risk-based compliance programs, many North American banks have cancelled their correspondent relationships with those nations, such as Antigua & Barbuda, the Republic of Panama,  the Bahamas,and the British Virgin Islands. Such a move is commonly known as "de-risking."

Now, US regulators have been rapping the banks on the wrist for the very actions that they have taken to reduce the risk of money laundering. Both the Treasury Department, and the OCC, have been critical of these correspondent account closures, asserting that Caribbean residents will have insufficient access to the global banking system. Frankly, I do not blame the US banks, for decades after rampant money laundering, into or through Caribbean tax haven banks, those institutions remain high-risk for a wide variety of financial crimes. American regulators, please do not lean on the banks for taking the very actions that will reduce the risk that they will facilitate drug money laundering.

The place to go for cleanup is the tax haven banks, gentlemen; we do not want to hear that the convenience of Caribbean businessmen trumps anti-money laundering, and countering the financing of terrorism. It's bad enough that these countries sell citizenships with passports (including diplomatic passports) to dodgy purchasers, for cash. Now, US regulators, who will  punish the banks for money laundering activity, want them to maintain correspondent accounts with banks at known money laundering jurisdictions ? Sorry, but protecting the bank from crime and terrorist financing comes first. Let the Caribbean tax haven banks use their correspondent relationships in Europe.


  1. I don't agree with this post! Not all Caribbean banks are what is being portrayed in the news and in blogs like yours. Millions of dollars are being spend by Caribbean banks on AML software and other technology to ensure that AML risk is minimized while little profit is being made. While many American banks ask for minimal KYC to open accounts International best practices are being adhered to by most Caribbean banks. It is a shame that while everyone like the US is talking about developing countries needing support and aid to develop the same US is shutting us out from growing our economies by de-risking

  2. If Caribbean banks have competent compliance officers, and banking best practices AML/CFT software, why are do many money US money laundering prosecutions show that the origins of the drug profits being laundered are banks in that region ? Why do these countries sell passports to known criminal elements, Middle Eastern nationals from sanctioned and terrorist enabling countries, and bank known OFAC sanctioned individuals and entities ? Having the tools does not matter if you let in dirty money. De-risking is the justified response to all that dirty money; let all those money laundering banks fail, because they cannot access the US banking structure.


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