I note with concern that a decision was recently made, to restrict credit card services from building societies, and let them remain the sole prerogative of Commercial Banks. Yet Building Societies I have met indicate they have been waiting over a year for their Commercial Bank Licenses to be approved.
Once again a monopolistic tendon is exposed, and begs a reason. The existing banks that operate vend their credit card services for around 4% per month, or 48% per year; Jamaicans need the credit, and there is room for competition in market forces: Which will head towards a lower interest rate for all, and I perceive more business from a wider credit card arrangement. In fact overseas business operators often use a credit card to fund their variable operating expenses, and it is up to the banking institution to do their due diligence.
But why is it taking so long to get an approved Commercial Bank license; especially for Building Societies of repute? Some I understand are over one year in process. Over the past five years new regulations have been laid down, including Anti-Money Laundering Procedures(AML), know your customer criteria(KYC), Source of Funds verification (SOF) and now the new US regulation FATCA , which is still pending. These new procedures have affected Banks worldwide, causing many to implement changes in their accounting procedures. Yet we find in Jamaica, the BOJ is ahead of the crowd, all these procedures have been adopted in Financial Institutions.
So the Building Societies have been included, most major Cambios, and generally all financial Institutions. So the conformation of new regulations is not a problem in Jamaica more than other countries, and records of all financial Institutions in Jamaica are being maintained and inspected by BOJ on a regular basis, with an exceptional Audit team.
There is no apparent reason for restricting credit card services from all viable Financial Companies, unless a preferred stance is being offered to Commercial Banks, and explanations will have to be in order.
A word about the USA’s FATCA regulations: It appears now that the IRS has made dual taxation agreements called IGAs, meaning Intergovernmental agreements, and will swap information about Jamaicans and Americans, and has made this pact with 50 other countries, still pursuing the matter with 80 others. IGAs are the preferred instrument with larger countries, for instance the G-8 countries. Yet I do not understand how they can circumvent the laws of Jamaica and pass an act that defies the constitution of this or any Country, by ignoring the “’Due Process” requirements.
If a business does not approve the changes, nor comply with instructions by declaring and accepting the terms of FATCA , then 30% of outstanding funds and assessments will be held in lieu of any declaration; another frightening thought. We are now liable to pay for someone else’s tax evasion.
Finally, anyone who contradicts this rule can be charged as a voice for Tax Evasion. Many Americans cannot open new accounts, for failure to close old ones. Americans and Expatriates face an impossible situation, as their mortgages are being called or denied. To the extent that an expatriate faces an obligation to IRS, the efforts of his local employer may come under scrutiny.
So it now seems we have a form of economic totalitarianism, unless serious changes are made to FATCA.
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