One area the US has been very short-sighted in its efforts over the years is in the Jamaican banking system. Their legitimate concern is a significant volume of illegitimate transactions but their solution, enhanced Know-Your-Customer (KYC) requirements is an abject failure. 1/
Because of these KYC requirements, it is very difficult to open a bank account in Jamaica. One typically needs a job letter, multiple references, proof of address, etc., small independent business owners often can't meet all that and just do without a bank account. 2/
The result is that over 30% of Jamaicans are "unbanked", having no relationship with a bank at all. The net effect of this fosters a parallel cash-based financial system for the "average Joe", one in which #MoneyLaundering is very easy because cash is untraceable. 3/
Since being in Jamaica I've been astounded at the volume of transactions that are done with cash. Because of these KYC restrictions many legitimate businesses have no bank account and do business only in cash. Even many wholesales only accept cash as a method of payment. 4/
The problem is that the sheer volume of this makes it easy for someone to piggyback an illegitimate business like drugs or lotto scamming on top of a legitimate business to launder the earnings. Or who needs to launder when large cash transactions are the norm in the economy? 5/
In short, by foisting these onerous KYC requirements onto Jamaican banks to shut out criminals, the US has only enabled crime by encouraging the success of a parallel cash-based system in which the ill-gotten gains can be readily spent and laundered. 6/
A better solution would be to make it easy for anyone to open a bank account, but do threshold monitoring. Once a customer passes a certain monthly threshold, KYC activities can be conducted to establish the source of the customer's income. 7/
Perhaps this is an area of improvement @AmbassadorUS_JA can consider in his efforts to reinvigorate the US/Jamaican relationship. The more transactions that pass through the formal banking system the easier it will be to catch the illegitimate ones and prosecute crime. 8/8
@AmbassadorUS_JA People in the US forget, a big reason Al Capone was able to go on for so long is he never maintained a bank account and did all his business in cash. If we make doing business that way the norm, we enable all sorts of illicit businesses to thrive.
