More supervision of money transfer and remittance agents in Jamaica

Friday, January 16, 2004

KINGSTON, Jamaica: The Jamaican House of Representatives this week approved amendments to the Bank of Jamaica Act, to introduce a regulation regime for money transfer and remittance agents and agencies.

Minister of Finance and Planning, Dr. Omar Davies who piloted the Bill, said there was a real and genuine risk of such institutions being used as vehicles for carrying out money laundering activities. 

He explained that while such entities had been designated as financial institutions under the Money Laundering Act and were required to observe the requirements imposed by that Act for the prevention and detection of money laundering, it was now necessary to complement the regulations imposed by that Act, with a system of active supervision.

The amendments will see the Bank of Jamaica (BoJ) being the body exercising supervisory control over these entities, and will make provisions for persons carrying out or intending to provide money transfer and remittance services, to obtain authorization from the Minister of Finance and Planning to continue with or to commence the provision of these services; for such persons to operate solely in accordance with the directions to be issued by the Minister of Finance through the BoJ; for the creation of the necessary offences and the imposition of fines and penalties.

Dr. Davies said the amendments would implement a regime that accords a level of supervision similar to that in place for cambios. "This is because money transfer and remittance agents and agencies do not take deposits and are not repositories of the savings and investments of the public. As such, the level of supervision which is imposed on deposit taking institutions by the Bank of Jamaica, will not be necessary in these cases," he told the House.

The Finance Minister emphasized that by placing money transfer and remittance agents and agencies within a regulatory framework, the country would also be addressing one of the several mandates imposed on it for fulfilling its international obligations to combat money laundering. 

He cited the Financial Action Task Force's 40 revised recommendations (which are applicable to co-operative states), which required that at a minimum, businesses providing money or value transfer or of money or currency changing, should be licensed or registered and subject to effective systems of monitoring and ensuring compliance with national requirements to combat money laundering and terrorist financing.

While agreeing that the need to bring money transfer and remittance agencies under the BoJ regulations could not be questioned, Opposition Spokesman on Finance, Audley Shaw queried the need to, in addition to bringing the money transfer companies on board in the Act, and as part of the listing of types of institutions that would apply, singling out the remittance companies for "what appears to be possibly special Ministerial powers, when other foreign exchange trading institutions are covered under the existing BoJ Act". 

Mr. Shaw inquired as to whether the mere addition of remittance services to the list of companies would not have sufficed.

In his response, Dr. Davies said that the provision was not uniquely directed at the remittance and money transfer group, and that it was consistent with provisions that governed other companies listed under the Act. He pointed out that the other institutions, which were not entirely remittance companies, had a higher level of inspection and regulatory oversight by the BoJ. 

"In essence, these regulations are needed to bring the remittance services somewhere along the line where the others have already been for a long time," he said, reiterating that what was being sought was to bring some order to an industry which had grown far beyond the scope that had been anticipated.

"There is nothing more beyond that. The government has no intention of changing its policy of exchange rate liberalization, not for remittance companies, not for banks, not for authorized dealers," Dr. Davies said.

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