By Durrant Pate
The Bank of Jamaica (BOJ) has given interest groups and the general public a further two weeks to submit comments on the proposed new regime governing money services and cambio operations.
The deadline for submission of comments and feedback regarding proposed amendments to the BOJ Act has been extended by two weeks to November. The initial deadline was Friday October 30. The proposed amendments seeks to afford greater protection to the financial sector by better targeting and sanctioning of the fraudulently illegal practice of unlicensed money service providers.
The proposed amendments are in keeping with international best practice and require an increase in the fines and penalties on remittance companies and cambios for breaches. The suggested amendments to the BOJ Act also seeks to update and strengthen Jamaica’s oversight regime for cambios and remittance companies and to address the deficiencies highlighted in the Caribbean Financial Task Force (CFATF) mutual evaluation 2017 report on Jamaica.
No obligation to include all comments
In extending the deadline to November 13, the BOJ underscored that while it will examine all comments, it is under no obligation to incorporate all the comments in its proposed amendments. In its discussion paper setting out the proposed amendments, the BOJ explains that the proposed changes to the law seeks to put into place CFATF recommendation 14 to strengthen the confront oversight regime for cambios and exchange bureaus in Jamaica to ensure a balance impact.
The consultation paper states that “the amendments will provide the BOJ with the remit or powers to confront and penalise Money or Value Transfer Service (MVTS) providers, as well as licensees, who facilitate dealings with unlicensed MVTS by creating new offences to restrict persons not licensed to operate MVTS from using any name, designation, trade mark or advertisement that implies or leads the public to believe that the persons is a licensed or approved MVTS provider”.
It is being proposed that the Central Bank be empowered by itself, or through an agent obtain a search warrant to enter premises, where the bank has reasonable grounds to believe a person is carrying on the business of a MVTS without the necessary approval, According to the discussion paper, “the amendments will increase the penalties for non-compliance, as the currently monetary sanctions are not deemed to be dissuasive”.
Dennis Chung vs. BOJ Deputy Governor Natalie Haynes
Debate on the proposed amendments saw differing positions being put forward by financial analysts, Dennis Chung and BOJ Deputy Governor, Natalie Haynes. In a letter to The Jamaica Observer last week, Deputy Governor Haynes pointed out that contrary to what Chung argued in his column in the newspaper, the rationale for amending the BOJ Act is not to “impose fines and penalties on remittance companies and cambios for breaches”, but in fact to protect the industry, in keeping with international best practice, by better targeting and sanctioning the fraudulently illegal practice of unlicensed money service providers.
She contended that the proposals do not include any changes to the existing process, which involves referring identified breaches of the Act to the director of public prosecutions for a ruling. However, in his rebuttal posed a number of questions to the Central Bank.
In addition he expressed the hope that further discussion on the consultation paper will take place at the level of organizations like the Private Sector Organization of Jamaica (PSOJ) and the Cambio Association, which both would have a more direct interest than he would.
Chung is insisting that the applicable fines seem excessive on their own and should really be a part of a defined process, whereby if the offence is committed then there is a warning first and these types of fines would be the end of a process.