'Bandooloo' reputation could harm business prospects - Phillips
Debate on a bill to provide the legal and regulatory framework to facilitate international financial services in Jamaica started in Parliament on Wednesday amid concerns from a senior lawmaker that Jamaica's problem with lottery scamming could scare off potential businesses that the new measure is intended to attract.
Contributing to debate on the new piece of legislation for the financial sector, Opposition Spokesman on Finance Dr Peter Phillips said Jamaica's scamming problem cannot be separated from the de-risking concerns that plague the banking industry.
"If we develop a reputation as a 'bandooloo' environment in which criminality is rife and people get ripped off, we are not going to attract the quality businesses that this legislation is aiming to attract," said Phillips.
He indicated that every effort must be made to further improve Jamaica's ranking on the corruption perception index.
Jamaica jumped 16 places on the Corruption Perception Index for 2015 after remaining stationary for nine years. The country moved from 85 of 175 countries in 2014 to 69 of 168 countries in 2015.
Minister of Finance and the Public Service Audley Shaw, who opened the debate on the bill, said the Government was committed to fighting lottery scamming, noting that Jamaica has forged international partnerships to tackle "this destructive and corrosive" problem.
Shaw charged that lottery scamming has led to "mayhem, murder, dislocations of all sorts, impacting families and impacting the tourism industry. What is happening is so far-reaching we all have to recognise that it is something that requires our collective attention".
The International Corporate and Trust Services Providers Act, 2016, is designed to promote and develop Jamaica as a prominent international financial services centre.
Shaw said the introduction of the legislation represents "a significant step in establishing and reinforcing the country's reputation as a robust and well-regulated jurisdiction."
"With this bill, Jamaica will be poised to take advantage of the enormous opportunities that exist in relation to the provision of corporate and trust services to the international market," Shaw told his parliamentary colleagues.
However, the finance minister said that based on the nature of the services to be provided under the new law, players in the industry are vulnerable to money laundering and terrorism-financing activities.
He said the Caribbean region is most affected by de-risking operations.
De-risking refers to financial institutions that close the accounts of its clients perceived as high risk for money laundering and other financial crimes or terrorist financing.
Shaw said Jamaica has to lead the way to create greater transparency because in its absence, the country's financial institutions could be at risk of foreign banks closing their relationships with them.
The bill, according to Shaw, has adopted best practices as prescribed by the recommendation of the Caribbean Financial Action Taskforce. The best practices include anti-money laundering and anti terrorism financing measures and the requirement for service providers to keep records of the ultimate beneficial ownership of entities.
Persons providing international financial services under the legislation will have to be licensed by the Financial Services Commission.