Money laundering checks are a burden on small countries, says Yameen

Money laundering checks are a burden on small countries, says Yameen
December 06 10:43 2016

President Abdulla Yameen has described international money-laundering checks as “red tape” that imposes a disproportionate burden on small countries.

Speaking Monday at a conference organised by the supreme court, the president said the Maldives lacked full sovereignty over its financial affairs because it was bound by global rules.

He identified bureaucracy by the banks in processing inward remittances, leakage of private information from banks, and the Maldives’ soiled image as challenges to doing business.

The conference “Doing Business in the Maldives – A Judicial Perspective” is aimed at improving the country’s ranking on the World Bank’s Doing Business Index, which placed it at 135 out of 190.

In his remarks, the president called for de-regulation, saying: “If we are to develop our financial and business sector, there must be mechanisms to receive large amounts of money as inward remittances via the banks or other means. But since the 9/11 incident, in the world, especially America is leading this effort – strictly monitoring cross-border money laundering. I am not saying that this does not affect countries like the Maldives.”

An inward remittance of US$50,000 prompts “red tape” by banks, he lamented.

He added: “Illegally obtained money crosses all of the world’s borders. But because of that, if we are to go to the extent we go to now, smaller countries have to bear a disproportionate burden.”

However, he later appeared to speak in favour of international financial rules, by raising the question: “Should we prioritise, if we want to work within the global economy, our sovereignty?”

The Maldives Monetary Authority and local banks had tightened checks in the wake of a corruption scandal in which at least US$79million was stolen from state coffers and an Al Jazeera documentary that uncovered a conspiracy to launder up to US$1.5billion through the MMA.

Yameen went on to laud the Maldives’ “robust economy”, despite economic growth slowing markedly in 2015, dragged down by a political crisis triggered by the jailing of opposition leaders and the historic corruption scandal.

While the politicisation of the judiciary has long been an international concern, the president said that criticism of Maldivian courts was prompted by incidents such as a forged court warrant for his arrest in February.

“Where in the world does this happen? Example, Maldives. It can happen in the Maldives. It has happened, and it can still happen. These are major issues. This is unthinkable in other parts of the world,” he said.

Calling for “self-discipline”, he said it was such incidents that allowed for criticism of the judiciary.

Then, praising the judiciary and the supreme court for its competence, he slammed their critics, saying: “Who are they? Why must they act in this manner against the Maldives? They cannot. But I just noted the reasons that allow for [such criticism].”

The purpose of the conference must be to “change the way we are portrayed abroad,” he added.

He went on to call for harsher penalties for leaking information from banks, appearing to refer to a Bank of Maldives staff who leaked documents that revealed how tens of millions of public money was embezzled by a private company linked to former senior government officials.

“I am not saying that bank accounts in the Maldives should be of the same standard as Swiss bank accounts. But our merchant banks, information on transactions from private accounts, information that draws everyone’s attention tomorrow, is being leaked from somewhere… So who will deposit their money with the banks?”

Many businesses prefer to deal in hard cash because “when the banking system is used, such questions of credibility arise,” he said.