Bank of America issued a statement July 28, halting Atlantic International Bank wire transfers, U.S. dollar bank drafts, and foreign currency transfers from Belize.
According to the statement, as reported by Channel 5 Belize, Bank of America is exploring options for the flow of incoming and outgoing wires and hopes to find a solution to the issue. The issue is called de-risking and is in compliance with the regulations currently imposed on Caribbean and Central American regions by large U.S. and European banks. This process has severed ties with several smaller banking institutions.
De-risking is when a corresponding bank looks at the bank’s rating according to Caribbean Financial Action Task Force standards for the region. If the rating is good then they continue to do business and they extend the level of business that they do. But, if the rating is poor, then they cancel any agreements with that bank so that the risks do not penetrate into their system.
This is important to virtually any bank in the world. The U.S. dollar is present in almost every nation around the world and is the major currency for international trade. At some point this money may end up in the United States. If the Justice Department decides that the money could be tainted, they can’t touch the other country’s bank, but they can cut the bank from the system.
The Caribbean Financial Action Task Force has created regulations for U.S. correspondent banks to control possible money laundering. Compliance to these regulations is causing many banks in the region to lose their connection to the United States.
These actions are done to control money laundering but it also creates undue hardships for individuals and legitimate business people. Many international corporations and investors have a legitimate need to move money around at times. If this money is deemed to be tainted, then serious fines can be imposed by the United States Justice Department.