BELIZE CITY, Thurs. Mar. 28, 2019– This week, Belize got the disquieting news of the closure of another bank, Atlantic International Bank Limited (AIBL).
Last year, the doors of Choice Bank, another offshore bank, were closed, and now, just several months later, the troubled AIBL has gone belly up. AIBL, fortunately, is not related to one of Belize’s biggest banks, Atlantic Bank Limited.
The troubles for AIBL, which is largely Belizean-owned, began as far back as 2016 when the bank got caught in the “de-risking net” and lost its correspondent banking relationship with the Bank of America. The bank was able to find another relationship with another correspondent bank to move money for their clients.
The bank was barely out of the woods when it was faced with another problem of huge proportions: it was accused of helping to facilitate the Sanctuary Belize real estate scam that was shut down by the US Federal Trade Commission.
AIBL had to defend itself against allegations about its association with a multi-million dollar real estate scam that was run by Sanctuary Belize. The principals of Sanctuary Belize reportedly received tens of millions of dollars from investors in the USA for luxury homes the company promised to build in southern Belize.
When the investors came to Belize, however, they found out that they had been hoodwinked.
In a story we ran in November 2018, titled “PM Mum on Sanctuary” (by Rowland Parks), the PM told us that he and the Central Bank had thought long and hard on whether “we should make any public statement, because it was, and still is, an extremely delicate situation.”
He expressed the hope that Atlantic International Bank Limited would be able to work through its difficulties with the US federal agency.
“Atlantic Bank International has a stellar reputation and all Belizeans should wish the bank well”, Barrow told us.
The bank faced a civil suit in the US, and reports are that it was able to fend off allegations of having some knowledge of what was going on at Sanctuary, but the smear on its reputation that came from being near to the Sanctuary Project and the pressure from the US federal agency proved too heavy a load to carry in the end.
In an interview with the press today, PM Barrow said that it was a pity that the US federal agency went after the bank, and although they didn’t find any persuasive evidence against AIBL, the bank was not able to sustain its legal campaign any longer. PM Barrow said the bank had asked the Central Bank of Belize to intervene and help them to wind up their operations.
PM Barrow said that the Central Bank would work to ensure that depositors were “treated as fairly as possible”, and that hopefully, most of the bank’s customers would get back their full deposits.
Barrow told the press that he did not see AIBL’s failure causing any systemic risk for the country’s banking system, because “when the banking community looks at the facts, they will see [that the bank’s failure] was not because of infrastructural laxity on the part of the regulator.”