Finance Minister, Audley Shaw has called for an international lobby to “highlight the risk to Jamaica and other Caribbean states of measures by developed countries and financial institutions to tackle money laundering”.

Banks have been withdrawing their services to local and regional financial institutions due to unspecified concerns about money laundering. The trend has been referred to by some observers as the ‘correspondent banking crisis.’

Correspondent banking is critical to small developing economies due to its facilitation of trade investments and remittances. Correspondent banks are used by local financial institutions to facilitate transactions originating in foreign countries. They act as a domestic bank’s overseas agent.

Speaking at the 2016 ‘Outlook for the Future’ forum, hosted by the Jamaica National Building Society (JNBS), in the United Kingdom last week, Shaw said while international rules must be followed, concerns must be registered when action is taken in an indiscriminate manner.

“We have to clean up our act, and follow international rules. At the same time, we have to register our concern that there is a push by developed countries, along with developed financial institutions, to put pressure on states like Jamaica and other Caribbean countries because of anti-money laundering concerns,” he noted.

Minister Shaw indicated that the Caribbean region receives about US$5 billion worth of remittances annually, about $2 billion of which goes to Jamaica.

He says despite this and the trade between Jamaica and the UK, there is the threat that major financial institutions want to ‘lock their doors’ to Jamaica on the basis of this anti-money laundering mission.

The Finance Minister says an international lobby has to be put in place “so that we don’t go from one extreme to the other. About 40 per cent of our economy is informal. If you lock the doors to a formal economy, the informal one will take its place,” he added.