Money transfer Company faces regulatory ‘review’

From NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Deputy Prime Minister yesterday said he has requested a regulatory “review” of this money transfer industry to make sure there are no loopholes that may be exploited by fiscal offenders.

K P Turnquest, describing the sector as “the next big thing”, informed Tribune Business the Government desired “to get a handle” on a business where operators and places are multiplying immediately after Western Union’s return to the market.

Acknowledging that electronic banking has been “the wave of the future”, and that cash transmission providers can help fill the void made by commercial lender exits from the Family Islands, ” Mr Turnquest stated this had to be balanced by ensuring the necessary anti-money laundering and terror funding controls were set up.

Disclosing that concerns had been expressed over the company’s rapid expansion and accompanying regulatory regime, Mr Turnquest stated: “I’ve asked for an overview of the whole situation simply to see how it occurred.

“There have been a number of complaints with respect to the handling and the whole transfer business; how it functions.” The Deputy Prime Minister declined to go into detail across the worries and “complaints” received from the authorities, other than to reaffirm: “There are a few issues we are taking a look at.”

His comments came as Tribune Business resources suggested there was growing industry disquiet over the way the Jamaican conglomerate, GraceKennedy, had acquired a licence to operate in the Bahamas as a Western Union agent.

A few contacts, speaking on condition of anonymity, questioned how GraceKennedy was able to enter a market that has been supposedly allowed for Bahamian-owned businesses just.

Tribune Business might find nothing in the National Investment Policy stipulating the money transfer business is exclusively reserved for local ownership. And, since it’s ‘Policy’, this is liable to be waived from the government of this day in some specific conditions.

This, it’s known, is exactly what occurred with all GraceKennedy’s permission to function in the Bahamas. Tribune Business has been told that approval was awarded in May 2016 from the former Christie administration after heavy lobbying from the former Jamaican prime minister, P J Patterson, on GraceKennedy’s behalf.

Mr Patterson was regarded as close to former prime minister, Perry Christie, and many members of his Cabinet, also made many trips to the Bahamas under the former government when representing companies such as Digicel.

Mr Turnquest yesterday stated he understood that GraceKennedy’s permit was acquired under the former government, and while possessing no direct understanding had “heard” of their former prime minister’s involvement.He additional he made inquiries of men in the money transfer company after Tribune Business disclosed GraceKennedy’s forthcoming, and had been told the conglomerate’s forthcoming had “kind of blindsided” the sector.

GraceKennedy’s arrival by its first location at Bahamian company, Tripoint Communications, appears to have ignited an expansion drive among rival Western Union agents that’s reminiscent of their post-recession net shop explosion.

Another Western Union representatives, notably Barry Malcolm’s Sun Cash, in addition to Money Maxx, have embarked on a rapid place roll-out in what most observers believe is a strategy designed to maintain out/restrict GraceKennedy’s ability to do similarly. Tribune Business found this out once, while visiting its own local plumbing store last week, the shop assistant spent much more time promoting its brand new in-store Western Union socket.

And there are several other possible entrants trying to enter an increasingly crowded space that, aside from both Western Union agents, also includes the likes of Omni Financial Group and Cash n’ Go.

Tribune Business’s focus was attracted to the site and Facebook page of some company named JVR Xchange, that bills itself as a soon-to-launch cash transfer and bill payment service that will have places in all 13 of Super Value’s food shops plus “three flagship shops” in New Providence. The launching date is February 2018, also coverage is also guaranteed in the Family Islands.

It’s this fast, ever-growing proliferation of cash transfer businesses and places that’s likely attracted the Government’s attention. Harvey Morris, chief executive of Omni, among the more established providers, told Tribune Business last week the “fast oversaturation” of this market could provide cover for increased criminal activity.

Confirming the authorities will be working together with the Central Bank, Mr Turnquest stated: “We’ve had many requests to facilitate this cash transfer system across the Bahamas.

“We’re taking a look at the business from a regulatory perspective. We want to be certain the system is secure and the regulatory provisions are set up – all the Know Your Client (KYC) provisions are set up – to safeguard the monetary system”

The Deputy Prime Minister added of this money transfer business: “It is getting the next big thing, so we must find a handle on it to guard the financial services program and do not allow abuses by lack of oversight.”

He declared that this had to be balanced by allowing the private sector to flourish, and stated: “All these are entrepreneurs seeking to fulfill a demand, a emptiness that is as a result of these [bank] closures and people have to be sensitive to this fact these communities need some kind of financial services.

“Digital banking is the wave of the near future, but we have to guarantee that the proper controls are in place.”

Mr Morris and associates of Omni’s administration group had indicated that fraudsters and other fiscal wrongdoers could exploit the lack of connectivity between different providers to ‘rebound’ from 1 currency transmission business to another.

They expressed concern that this may enable a money launderer, as an example, to conceal their actions by running small transfers with numerous transfer outlets – a procedure that’s known as ‘layering’.

Omni’s executive group stated the entire money transfer industry required to work together and “play close attention” to such difficulties, expressing concerns that they may result in the Bahamas being ‘blacklisted’ however again if unchecked.

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