CARICOM countries will jointly contribute some US$240,000 to lobbyists to act on behalf of Caribbean-based banks to avoid censure and loss of correspondent banking access in the face of the looming Foreign Account Tax Compliance Act (FATCA).
Prime Minister Dr Keith Rowley returned yesterday from the 28th Intersessional Meeting of the Conference of Heads of Government of Caricom, held in Guyana over the past two days, and said the banking sector was chief among the discussion topics.
Speaking to reporters upon his return at Piarco International Airport, Rowley said the banking sector of the Caricom countries could be denied access to correspondent international banks if the FATCA legislation is not passed in time.
“It is only for a short period as it is a specific assignment. I think it's $US40,000 for the period for which the lobbyist would be hired to carry out this specific exercise,” he said.
“Against this background, the work of the Prime Minister of Antigua/Barbuda (Gaston Browne) had identified that there were adequate lobbying arrangements in place, but there is a cost to that. The heads agreed that that cost should be incurred and the lobbyists should be hired and put to work to join the efforts made by Caricom to ensure that we stave off any further de-risking or loss of correspondent banking access,” he said.
Browne, Rowley said, had been charged with the responsibility of finding such lobbyists since the last meeting in July, and has been lobbying banks in various US-based cities to avoid censure of Caribbean-based banks.
The deadline date for the FATCA vote in Trinidad and Tobago is February 20.
“I wouldn't say alarm, but strong concern,” he said, describing the tone of those meetings.
He said discussions centred around the “threat to our banking system”.
“The threat that this poses to the collapse of the banking in the region if in fact we are to find ourselves regarded as a high-risk area and lose correspondent banking facilities,” he said.
Rowley described this as a “front-burner” matter.
He said at the last intersessional meeting in July, Browne was charged with the responsibility to lobby on behalf of Caricom.
“To ensure that Caricom's banking system is not denied access to the corresponding banks so that they are not denied access to our trade,” he said.
Rowley said a report on that issue was presented at the meeting.
“It maintains that we are at great risk, and a decision was taken at this meeting to encourage all countries to move with great urgency to ensure that we pass the necessary legislations, that we are compliant with the international standard that is demanded of us and that we ensure that we make every effort that we lobby in the relevant quarters that we are not treated adversely, by accident,” he said.
Energy sector and Guyana
With regard to the energy sector, Rowley said T&T will now look to Guyana to bridge the gap in local oil production.
“Guyana is on the cusp of becoming a hydrocarbon producer, mainly oil, and we in T&T are an importer of oil and we have a refining capacity of approximately 175,000 barrels per day,” he said.
Rowley said a “significant” amount of money was spent upgrading the refinery but the local production was very low.
“We are now producing in the order of 70,000 barrels per day and we have to import the difference. So Guyana has the good fortune in becoming an oil producer was the subject of lengthy discussions,” he said.
With 100 years' experience in the energy business, T&T will offer Guyana technical expertise.
“We will need to build up an immediate relationship between the technical people in our oil company with the people of Guyana who are now setting up to build the administrative framework to deal with a production-sharing contract and their ministerial oversight as required by an oil producer,” he said.
“We made those offerings to the people of Guyana and they are very interested in working with Trinidad and Tobago and strengthening Caricom's self-sufficiency,” he said.
Rowley said “very soon”, T&T will host a technical team from Guyana to continue talks on how the two countries will be able to help each other as Guyana's energy industry begins to function.