WILL THE CBI SCANDAL ACCELERATE DE-RISKING OF CARIBBEAN BANKS' CORRESPONDENT ACCOUNTS IN THE UNITED STATES?

You can be assured that Caribbean bankers did not miss the fact that, among the named defendants in MSR MEDIA vs. LES KHAN, the RICO civil lawsuit filed in US District Court in Florida, is the ST. KITTS-NEVIS-ANGUILLA NATIONAL BANK LIMITED, as well as the assertion that the bank allegedly facilitated the movement of a reported one billion ($1bn) US Dollars to China, in violation of Kittitian CBI law. American financial institutions will be keeping a close eye on this case, and will be on the alert for any "copycat" filings against individuals, and their banks, in other CBI jurisdictions, as part of their required risk-based AML compliance programs.

Additionally. bank officers in US banks who maintain correspondent accounts for indigenous Caribbean banks, and who are responsible for assessing whether to engage in De-Risking of the five CBI EC states, will definitely be reexamining Country Risk, due to the combination of the RICO lawsuit, and the recent EU regulation mandating that CBI sales agents and companies have effective AML/CFT programs. While banks in St. Kitts and St. Lucia, in which individuals and entities in both countries are allegedly involved in billion dollar corruption and illegal conduct, both are now at serious risk of losing all their UIS correspondent accounts, expect the other three jurisdictions' banks ( Antigua & Barbuda, Commonwealth of Dominica, and Grenada) to be under serious consideration for De-Risking.

There is no more important reason for the East Caribbean states to reform their CBI programs forthwith, than the imminent loss of access to the New York financial center, and the consequential failure of those banks for inability to service their customers in international trade. Caribbean banks need access to the United States to remain competitive regarding foreign banks located in their markets, and they very well might go under without those prizee correspondent accounts in New York. Let us hope this dangerous situation is avoided through prompt reform of CBI, wherever it is sold.