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Central Bank Chief: ‘Ultimate’ Goal Is To Bank Web Shops

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday said the “ultimate” goal is for the web shop industry to satisfy commercial bank concerns and reach the point where it can be “banked”.

John Rolle told Tribune Business that the first step in achieving this goal was for there to be “direct interaction” between commercial bank compliance staff and the Gaming Board, the web shop regulator, so the former could better understand the industry’s regulatory controls and standards.

This, he emphasised, would both allow the Gaming Board to identify “gaps” in the web shops’ anti-money laundering systems and enable the commercial banks to understand how these procedures were implemented in practice.

Mr Rolle reiterated that the Central Bank’s licensees would not be forced by the regulator to accept web shop deposits, but acknowledged that the long-term objective was to bring that industry into the formal financial services economy.

“Ultimately, the expectation is that we would get to the point where whatever satisfaction is needed is there,” the Central Bank governor told Tribune Business.

“It is an activity [web shops] that has been legalised, and we have to make sure it is operating in a fashion that allows it to be banked.”

Bringing web shop gaming into the formal Bahamian economy, and having its deposits accepted by commercial banks, thereby integrating the sector into the financial services system, was one of the Government’s key goals in legalising, regulating and taxing the industry.

This objective, though, has met with minimal success to-date, as only Bank of the Bahamas, which is 65 per cent majority-owned by the Government, has publicly confirmed it is accepting web shop deposits.

Both Commonwealth Bank and Fidelity Bank (Bahamas) have declined to accept this money, while the Canadian-owned banks - Royal Bank of Canada, Scotiabank and CIBC FirstCaribbean - say they are prevented from doing business with the web shops by their global policies on gaming monies.

This means that a sector where hundreds of millions of dollars are being recycled every year remains largely outside the formal economy and banking system, representing a potential money laundering risk that could attract the attention of international watchdogs.

However, Mr Rolle’s comments are likely to alarm some observers, who will interpret them as Central Bank pressure on its licensees to bow to Government policy and accept web shop monies despite their legitimate reservations about doing so.

Mr Rolle, though, repeated the sentiments contained in his speech to the Grand Bahama Chamber of Commerce last Friday, reiterating that the Central Bank wanted commercial banks to make web shop-related decisions that were based on fact, rather than perception.

“By promoting direct interaction between the regulators and the [banks’] compliance people, they can ask questions and, if they detect there are any gaps, it’s an opportunity to discuss it one on one with the Gaming Board and other regulators so they can make these tweaks,” Mr Rolle told Tribune Business.

“We do know that the anti-money laundering standards for banks are the same principals that the Gaming Board puts across to its licensees.

“I think that now the wider financial services industry has to get a good understanding of how it [the web shop industry] works in practice with the movement from guidelines and standards to actual operations.”

Reassuring that no commercial bank will be forced to transact business with the web shops, Mr Rolle added that any relationship between the two sides would have to “stand on its own two feet”.

“They will have to satisfy any bank they deal with in terms of controls and systems they have in place,” he told Tribune Business. “It’s a client-by-client type of satisfaction they will have to provide.

“Some of our commercial banks have policies in terms of the client they bank outside of this jurisdiction, and that’s not going to change because of this jurisdiction.”

Comments

PapaGolf 2 years, 9 months ago

The integration of the webshops into the formal banking sector is a moot point because of two elephants in the room: 1. The sources of the webshops' funds are unknown/possibly illicit and cannot be verified in a meaningful manner; 2. The Gaming Board is an ineffective regulator: (alleged) bribery and payoffs, along with (alleged) non-implementation of AML/KYC software in some webshop establishments.

The loss of correspondent banking relationships (aka vital linkages to the global financial system) is not worth it to the legitimate banks.

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MonkeeDoo 2 years, 9 months ago

Didn't Christie ask anyone before he doublecrossed the people ? Someone should tell him not to mix weed killer and sugar together. It could blow his arse up. ! What a dumb shit he is. Even the Bible tells us about Silk Purses and Sows Ears. You cant make crooked straight. Too late, too late shall be the cry.!

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Well_mudda_take_sic 2 years, 9 months ago

Most Bahamians will quickly tell you that crooked Christie and the crooked numbers' bosses should all be incarcerated for lengthy periods given the nature of their crimes against the Bahamian people.

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Well_mudda_take_sic 2 years, 9 months ago

Re-post: It is readily apparent that John Rolle is in way over his head as was the case for his predecessor Wendy Craigg. He is sorely lacking in the core competencies and relationships necessary within the local and global financial communities to carry out his mandate as Governor of The Central Bank. As a result, he is unable to stand up to the political pressures exerted on him by Christie as PM and Minister of Finance and this does not bode well for disciplined monetary policy and the proper regulation of both our local and offshore banking sectors. A weak Central Bank Governor who fails to act in the country's interest as opposed to Christie's own interests spells serious trouble for all of us going forward. One only has to look at Wendy Craig's dismal and very costly failure to stand up to Christie's shenanigans at the Bank of The Bahamas to understand why a weak Governor suits Christie just fine but will unhinge or possibly shutdown our financial system from the rest of the global financial community. Right now the global financial community views the Bahamas and the corrupt Christie-led government as a most serious threat to the global anti-money laundering initiatives that have been put in place over the last 15 years or so. Of course the fatal mistake here was Christie's decision to "take funds" from the numbers' bosses in exchange for ignoring the outcome of the national referendum held on "legalizing" the corrupt racketeering and other criminal activities of the gaming web shops operated by the likes of Craig Flowers and Sebas Bastian. There is little John Rolle can do to right the ship that Christie seems hell bent on sinking! At best, Rolle may be able to do something to relieve Bahamians from the outrageously oppressive bank fees that local banks are now charging Bahamians which force many Bahamians to deal in much less costly cash transactions outside of the banking system.

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bogart 2 years, 9 months ago

The Governor of the Central Bank of the Bahamas in previous article allowed market forces to settle the matter of the fees the Banks are charging Bahamian customers. The Board of Directors of the Central Bank should also have a say in this matter as the result may well drive greater volumes to transact in the parallel 400 outlets. Sadly foreign textbook and foreign educated financial experts must bear in reality, local culture, demographics, small island, interwoven close family ties, and local influences in making decisions for the growth of the nation. Common sense should apply as foreign textbook measures are not always correct.

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observer2 2 years, 9 months ago

The web shops are a state of the art parallel banking system. With over 400 locations it has more branches than all the retail banks put together.

There are no lines in the webshops, no KYC, cash is accepted no questions ask, money is deposited, saved and can be transferred internally and globally, they are "semi" licenced, what ever that means, they make massive political donations and they have no published audits. The Toronto head offices of RBC, Scotia and CIBC have rejected dealing with them.

It is proposterous that the Governer of the Central Banks wants to intergrate these shops into our financial system further staining our tenuous US correspondent banking relationships.

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bogart 2 years, 9 months ago

In defense of any Prime Minister of the Commonwealth of the Bahamas it is not his sole position to decide on every and all facets of the web shop/ banking challenges, or his sole decision to decide on the year after year after year etc. There are number of challenges like the Bank of the Bahamas also tied into this situation. There are a numbers of officers, govt employees, various officers in a number of ministries who should have been doing research, investigations, analysis in order for any Prime Minister to do his national thing. The same goes for the former Prime Minister Ingraham. They stand up, and relay findings for the Bahamas to move forward. Sadly, some of these persons who advise, research or are in decision making roles seem to be inept and investigations should immediately and real time corrected. Officers who are found to be deficient must be removed immediately meaning real time if we as a nation go forward. Where officers are found to have harmed or impaired the the proper decisions then there should be court martial and jail time. No few individuals, officers should derail the many sacrifices, sweat and hard work the majority of workers and Bahamians have built. Supportive agency such as an Ombudsman must also be in place.

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Well_mudda_take_sic 2 years, 9 months ago

There is no defense for a Prime Minister of The Bahamas "taking funds" from the numbers bosses on a quid pro quo basis. We, the Bahamian people made it clear to the corrupt Christie-led PLP government that we are very much opposed (and will remain opposed) to our banking system being destroyed by efforts to 'legalize' the racketeering and other criminal activities of the gaming web shops operated by the likes of Craig Flowers and Sebas Bastian. Christie, having to make good on his quid pro quo arrangement with the numbers bosses for funding his re-election campaign in 2012, defied the warnings of the Bahamian people and the global banking regulators. A political party like the PLP that kowtows to organized crime for its own self-gain cannot care less about the well-being of The Bahamas and its citizenry. Thanks to Christie and Allyson Maynard-Gibson (a/k/a the Wicked Witch), the entire global community now considers The Bahamas to be an aider and abettor of organized criminals involved with the laundering of vast sums of money through their gaming web shop enterprises. The numbers bosses like Flowers and Bastian are now a magnate for the laundering of the proceeds of crime conducted not only by themselves regionally but also by other criminal elements worldwide. For a cut, our local numbers bosses will launder the dirty laundry of just about anyone.....no questions asked!

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sheeprunner12 2 years, 9 months ago

Perry has to squeeze the numbers bosses to fund his election campaign ......... and then we will see the results of the collusion after the next election (if the PLP is re-elected) .......... John Rolle is just the mouth-piece to send the coded message to the clearing banks

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ThisIsOurs 2 years, 9 months ago

How will they ever vett the source of funds for the 20 plus years of their illegal activity?

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bogart 2 years, 9 months ago

In equal fairness in the creation of the old Kelly/ Arawak Cay site back to shipping and to remove the huge trucks from bay St. some 19 Bay St investors subscribed some one million each for 40% shares of Port Arawak which then did an offering to public and govt workers allowed to borrow interest free loan from public treasury to buy ordinary shares to fund port for preference shareholders guaranteed some 11% interest pa and no allowance for another competing port within some 20 mile range and 25 year exclusive something like that and while this was going on the Chinese funded the construction of a 55 acre port in Coopers Town and which seems plagued by finding blue holes delaying construction and at the same time Chinese funding for a canal to separate Little Abaco from Abaco because some 100 years ago the lumber company filed in the gap to extract lumber so now its time for the fishes to get to swim back where they originally swam as though any 100 year old fish still remembers the old waterway. And to top it off after the canal being dug a bridge is to be built to cross the canal just dug all of course to be repaid by the taxpayers. There is something about digging ditches.

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Greentea 2 years, 9 months ago

Flowers will get the bank he always wanted after all.

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DEDDIE 2 years, 9 months ago

It's not difficult to get gaming moneys into the "so call legitimate banks". They accept gaming moneys practically every day. All the gaming bosses have to do is open accounts in their own names and pay themselves a high salary. Another way is to open laundromats, invest in fishing boats and say you sell fish, the list goes on and on. More illegitimate moneys goes through Canada in a day than what the Bahamas would see in a decade. Canada's GDP is 1.5 trillion dollars and the Bahamas is 11 billion. So even if 1% of the Canadian economy is illegitimate, it is still more than our entire GDP. Statistics in Canada shows that the underground economy is 42 billion dollars.

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