So we will simply try to survive it and I will try to monitor it. All eyes are on Venezuela right now, and Venezuela's effect on the Caribbean countries from energy to trade and other things are really concerning, particularly Eastern Caribbean nations. So, I guess the concern that I have is, all 6 countries of the Company of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, that includes efforts to promote regional cooperation and reduce hardship; so to what extent have ALBA and Petrocaribe increased Venezuela's impact in the Caribbean? I think I can answer that concern enormously.
Mr. Farnsworth. Mr. Chairman, thank you. And I agree it is the pregnant problem if you will of the region. Venezuela is a nation that is in collapse. Economically, some are saying it is no longer a democracy. It is a country that has extreme and enduring internal issues which it is going to take years to get beyond. Therefore, the relationship that Venezuela has actually established with a number of nations of the Caribbean in good times has become stretched, due to the fact that the largesse that Venezuela has actually been able to honestly hand out or to provide a concessionary on concessionary terms has been much constrained in the current environment.
I think what I would state is in the existing environment, because of the troubles that Venezuela is having and honestly because of the chances that we have in the United States through the whole revolution of energy that we https://zenwriting.net/faugusbaf0/some-allow-ten-years-to-be-settled have actually seen in our own nation over the last a number of years, we have an opportunity to come into the Caribbean as a partner and say, look, you understand how to get rid of parents timeshare the programs and the activities that you may have been finishing with Venezuela are no longer appropriate and we can provide the exact same things that you require without the political or without the ideological overhang that you may have had previously - What was the reconstruction finance corporation.
Duncan. Let me ask you something about that. Exists enough trust of the United States for us to enter that void with those countries? I don't know the answer to that. Mr. Farnsworth. Well, I believe in the current environment we need to do some foundation. We require to do some spade work. I indicate, look, Petrocaribe was an extremely effective program and we comprehend why. I indicate, it was prompt, it provided something that the leaders required when they needed it. It was symbolic. It was really, really easy to describe to people. I suggest, we are getting oil from Venezuela.
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It was on one problem. And I believe often, when the United States engages with the countries of the Caribbean, we have a lot of well suggesting programs and fantastic ideas, however they are watered down, right? Not misguided, however diluted in terms of the effort and the focus. Under Petrocaribe, it was one product easily explained, extremely symbolic, and individuals said Venezuela's our buddy - How long can you finance a used car. And I believe what we need to do better from the United States' perspective is to develop that level of trust through a continuous sustained engagement with the area so that people can state, look, we do trust you. Which of the following approaches is most suitable for auditing the finance and investment cycle?.
Mr. Duncan. I personally think energy is a terrific chance for us, no doubt about that. Let me explore money 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 institutions. Does that policy work to decrease money laundering and chances for terrorist organizations to access the financial system? And that is probably to Sally. Ms. Yearwood. In a lot of methods it does the opposite, because once U.S. banks move out of the region what you have actually developed in reality is a void which becomes filled by other institutions.
So, what is being produced is a scenario where there is more opportunity for terrorist funding or something to fail and someone to make use of that void. So I would state that the U.S. banks definitely need to be a crucial and vital gamer in the regional money system. Mr. Duncan. I am probably less concerned, and possibly I shouldn't be, however less worried about terrorism financing through the Caribbean financial organizations as I am about money laundering. What do you need to finance a car. We simply saw in Panama, a substantial $800 million cash laundering plan, realty involvement, huge number of staff members associated with emmy mcdowell a legitimate company-- still a money laundering plan.
Ms. Yearwood. Part of the problem is the perception of risk versus the truth of the risk. Banks are not leaving the Caribbean because there is money laundering. Banks are leaving the Caribbean since the costs of compliance are overwhelmingly stacked against the banking system. You have little jurisdictions and for each account that you are dealing with you have to put a big amount of money into making certain that the cost of-- that business is clean. But what we need to perform in effect is produce a system where the regulators, the banks, everybody is collaborating, info is being shared, and when information is passed between the regulators and the Treasury or the regulators and the banks, people know where deep spaces are.
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And the problem in the Caribbean is that the economies are small, putting these systems in location costs a lot, but all the Caribbean will tell you that they satisfy the compliance regulations. Therefore there is a detach in between what is really happening and what people are stating is happening. I believe among the typical problems is the breakdown between what is going on in offshore monetary services and what is going on in banking. And the Panama Papers were extremely largely linked to the overseas monetary services industry versus the reporter banking and de-risking problem that is currently being faced.
Mr. Duncan. I am assuming that the Federal Federal government is monitoring-- in Panama Documents a person is never ever implicated in that and begin moving monetary resources around, in perhaps, the Caribbean nation. I am assuming our Treasury and FBI are monitoring that, I would presume. So I am going to go on and accept the ranking member. Mr. Sires. Among the reasons that I supported, or I still support the export of energy from this nation is to offset the impact of Venezuela because generally they were using it for political purpose. You know, if you take a look at the votes they took at the U.N.
So now Venezuela is in trouble. I think their production is something like 40, half less, and there is a void there that we can help fill and, you understand, we can really help in regards to just having a bit more affect on individuals. The other thing that frets me is that on the eastern part of the Caribbean. Basically, we have an Embassy in Barbados and it serves all those islands there. On the other hand, you have Venezuela, Cuba, Brazil, they all have a presence there. So I was simply wondering how much of a competitive downside this puts us when we do not have, truly, a presence in the Eastern Caribbean.