So we will just attempt to get through it and I will attempt to monitor it. All eyes are on Venezuela right now, and Venezuela's effect on the Caribbean nations Click for source from energy to trade and other things are very concerning, especially Eastern Caribbean nations. So, I guess the question that I have is, all six nations of the Company of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, which includes efforts to promote regional cooperation and relieve hardship; so to what level have ALBA and Petrocaribe increased Venezuela's impact in the Caribbean? I believe I can answer that concern enormously.
Mr. Farnsworth. Mr. Chairman, thank you. And I concur it is the pregnant issue if you will of the region. Venezuela is a nation that is in collapse. Financially, some are stating it is no longer a democracy. It is a nation that has extreme and enduring internal issues which it is going to take years to get beyond. And so, the relationship that Venezuela has actually developed with a variety of countries of the Caribbean in good times has become stretched, due to the fact that the largesse that Venezuela has actually had the ability to honestly distribute or to offer a concessionary on concessionary terms has been much constrained in the existing environment.
I think what I would say is in the present environment, since of the troubles that Venezuela is having and honestly because of the opportunities that we have in the United States through the whole transformation of energy that we have actually seen in our own nation over the last several years, we have a chance to come into the Caribbean as a partner and say, look, you know the programs and the activities that you might have been making with Venezuela are no longer pertinent and we can offer the exact same things that you need without the political or without the ideological overhang that you may have had previously - How to finance a home addition.
Duncan. Let me ask you something about that. Is there enough trust of the United States for us to step into that void with those nations? I don't know the answer to that. Mr. Farnsworth. Well, I think in the existing environment we require to do some groundwork. We require to do some spade work. I imply, look, Petrocaribe was a very successful program and we understand why. I indicate, it was timely, it supplied something that the leaders required when they required it. It was symbolic. It was extremely, very simple to explain to people. I suggest, we are getting oil from Venezuela.
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It was on one problem. And I think sometimes, when the United States engages with the countries of the Caribbean, we have a lot of well suggesting programs and wonderful ideas, but they are diluted, right? Not misguided, but diluted in regards to the effort and the focus. Under Petrocaribe, it was one product easily discussed, extremely symbolic, and individuals said Venezuela's our friend - What does nav stand for in finance. And I think what we require to do better from the United States' perspective is to build that level of trust through an ongoing sustained engagement with the region so that individuals can say, look, we do trust you. What is a swap in finance.
Mr. Duncan. I personally think energy is an excellent chance for us, no doubt about that. Let me dive into cash laundering and terrorism financing a little bit. There is a big push by the U.S. to have U.S. banks sever relationship with Caribbean-based banking organizations. Does that policy work to lower money laundering and chances for terrorist companies to access the monetary system? And that is probably to Sally. Ms. Yearwood. In a great deal of ways it does the opposite, since as soon as U.S. banks vacate the area what you have developed in fact is a space which becomes filled by other organizations.
So, what is being produced is a circumstance where there is more opportunity for terrorist financing or something to go incorrect and someone to exploit that void. So I would say that the U.S. banks definitely require to be a key and crucial gamer in the regional cash system. Mr. Duncan. I am probably less worried, and possibly I should not be, however less worried about terrorism financing through the Caribbean monetary institutions as I am about money laundering. Which results are more likely for someone without personal finance skills? Check all that apply.. We simply saw in Panama, a big $800 million money laundering scheme, real estate participation, big variety of workers associated with a legitimate business-- still a cash laundering scheme.
Ms. Yearwood. Part of the problem is the perception of threat versus the truth of the danger. Banks are not leaving the Caribbean because there is money laundering. Banks are leaving the Caribbean since the costs of compliance are extremely stacked versus the banking system. You have small jurisdictions and for each account that you are handling you have to put a substantial amount of money into ensuring that the cost of-- that the services is tidy. But what we have to do in impact is daily finance group create a system where the regulators, the banks, everyone is working together, details is being shared, and when info is passed between the regulators and the Treasury or the regulators and the banks, people understand where the voids are.
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And the issue in the Caribbean is that the economies are little, putting these systems in place costs a lot, however all the Caribbean will tell you that they satisfy the compliance regulations. Therefore there is a disconnect in between what is in fact occurring and what people are saying is taking place. I think one of the typical grievances is the breakdown between what is going on in overseas monetary services and what is going on in banking. And the Panama Documents were extremely mainly connected to the overseas financial services market versus the correspondent banking and de-risking issue that is currently being faced.
Mr. Duncan. I am presuming that the Federal Federal government is keeping track of-- in Panama Documents an individual is never linked because and start moving funds around, in potentially, the Caribbean nation. I am presuming our Treasury and FBI are monitoring that, I would assume. So I am going to go ahead and yield to the ranking member. Mr. Sires. One of the factors that I supported, or I still support the export of energy from this country is to offset the impact of Venezuela due to the fact that generally they were using it for political function. You understand, if you take a look at the votes they took at the U.N.
So now Venezuela remains in problem. I think their production is something like 40, Hop over to this website 50 percent less, and there is a void there that we can help fill and, you know, we can actually assist in terms of just having a bit more affect on people. The other thing that stresses me is that on the eastern part of the Caribbean. Essentially, we have an Embassy in Barbados and it serves all those islands there. Meanwhile, you have Venezuela, Cuba, Brazil, they all have an existence there. So I was simply wondering just how much of a competitive drawback this puts us when we don't have, really, a presence in the Eastern Caribbean.