(NEWSDAY TT) International banks have already begun the de-risking process, Attorney General Faris Al-Rawi said.
“We are already being de-risked. Corresponding relationships are already in jeopardy. Don’t ask me, ask (the Bankers’ Association, or BATT) and they will tell you their corresponding (foreign partners) banks have already started applying enhanced due diligence mechanisms (or else) some banks have already said they are not doing business,” Al-Rawi told reporters after an International Men’s Day forum at the Hyatt Regency Port of Spain.
He said UK and US banks have already begun to apply this due diligence in accordance to the standards put forward by the Global Forum on Transparency and Exchange of Information for tax purposes and the Financial Action Task Force.
Both of these international agreements, of which TT is a signatory, seek to strengthen international co-operation on combatting money laundering, fraud, tax evasion and terrorist financing. TT, the government has said, has until the end of November to pass the Income Tax amendments or else start facing consequences.
The first step to compliance is an amendment to the Income Tax Act that will allow the police and banks access to personal information for financial reporting purposes.
If international banks refuse to do business with local banks because, then TT runs the risk of being unable to do business on the international market. Among the requirements of the bill, however, are stringent reporting on financial and personal information, something the Opposition has raised as a concern for privacy.
Al-Rawi dismissed that argument for privacy as “making no sense.” “We did FATCA where we agreed to do exactly this—which is exchange certain information spontaneously—we are asking for this information for financial intelligence and the proceeds of crime.
We are asking for the TTPS in the course of investigations with the authorization of the courts to have access (to personal information). Who could complain about that?”
Right now, the amendment requires the Board of Inland Revenue, which has personal tax information, to be able to give banks and the police access to that information. “The secrecy clause in section 4, sub-clauses 1 and 2 make it an offence for secrecy to be breached.
For the BIR to provide information in certain circumstances you can’t do it spontaneously or automatically. The international obligations are asking the BIR to be able to disclose information to the Financial Intelligence Unit and to law enforcement. We can’t comply with that that until we amend section 4. Obviously the entity to comply is BIR,” he said.