BELIZE CITY, Mon. Aug. 10, 2015–Prime Minister and Minister of Finance Dean Barrow told journalists yesterday, Sunday, August 9, that the recent developments in banking in the country—the impending departure of CIBC FirstCaribbean International Bank from Belize, as well as the decision by Bank of America to cut off two more commercial banks in Belize—are “unfortunate,” but he went on to say that he had been assured that Heritage Bank, which is purchasing the assets of FirstCaribbean Bank, would hire a majority of the staff who will be severed by FirstCaribbean in the coming months.
Barrow said that CIBC has taken a business decision, presumably because they had ceased to be as profitable as they used to be.
Barrow added that it is unfortunate that the bank will be leaving, but that he is happy that Heritage Bank would be purchasing CIBC’s assets, the book value of which amounts to nearly $300 million.
Heritage Bank is among 6 domestic banks which have been meeting to find ways to buffer the impact of “de-risking” by foreign banks in places like the US, where major banks have decided to sever correspondent banking relations with smaller banks in Belize after weighing money laundering risks.
However, Barrow went a step further to say that Belize’s offshore banking sector has also been targeted due to the classification of the country as a tax haven and what is termed “harmful tax competition,” because the sector allows foreigners to establish banking relations in jurisdictions like Belize, which place these account holders, whose true identities can be hidden, under a different tax regime.
Barrow told the press that large jurisdictions are determined to destroy Belize’s offshore sector, and while they claim “harmful tax competition,” he said, “there is a great deal of hypocrisy on the part of the big countries.”
Barrow said that the Bank of America’s decision to sever more banks in Belize has affected the international banks. He added that apart from the Belize Bank, which was severed in April, no other domestic bank has yet been affected—and he hopes it will remain that way.
Just over a week ago, we had been informed by the Central Bank of Belize that two more banks in Belize—one domestic bank and another which holds a license under the International Banking Act—were scurrying to put alternative measures in place for correspondent banking relations, after they received warning that their correspondent banking relationship with Bank of America could soon be cut off. The international bank had issued a notice to its customers stating that the relationship would be cut off at the end of July.