PARLIAMENT backbenchers, fired up by a proposed "chicken feed" limit on cash transactions outside the banking system, yesterday forced the Government to double the $500,000 cap it was hoping to impose under the Proceeds of Crime Act (POCA).
The revolt was triggered by an objection raised by the Leader of Opposition Business Delroy Chuck, who suggested that the figure was so low it was "chicken feed" and could make criminals of law-abiding people.
Chuck received support from a number of Government backbenchers, who agreed that a limit of $500,000 was too low for small and medium-sized businesses which wanted to avoid the financial institutions' excessive administrative fees.
Minister of national security Peter Bunting, who was piloting the measure, got full support from Attorney General Patrick Atkinson. But Chuck got the support of People's National Party backbenchers Fitz Jackson, Richard Parchment, and Andre Hylton, as well as Opposition MPs Karl Samuda, Pearnel Charles, Mike Henry and Everald Warmington, eventually forcing the minister into a compromise, resulting in agreement on a $1-million limit.
Bunting based his case for the limit on Jamaica's need to comply with the money laundering and combating of the financing of terrorism framework advocated by the Caribbean Financial Action Task Force (CFATF), of which Jamaica is a member and which requires compliance with international standards.
Bunting said that, despite Jamaica's best efforts, the country was still failing to address some deficiencies identified from 2005, which could lead to sanctions being imposed, including a public statement that the island was insufficiently compliant, or suspension from the task force or termination of membership.
"Obviously, if that was to happen, we would be in a serious position," the minister insisted.
He admitted that the most controversial amendment in the Bill, named the Proceeds of Crime (Amendment) Act 2013, was clause 13 which proposed a limit, "beyond which transactions in cash cannot be undertaken by anyone other than a permitted person".
He explained that permitted persons, in this context, referred to banks or other licensed financial institutions, including cambios.
Atkinson said that by implementing the limit, the Government was seeking to curtail money laundering and tax evasion, the effects of which were holding back the economy.
"I support the amendments wholeheartedly," he commented.
But Chuck said that merchants and gas station owners were forced to use cash to meet financial commitments to avoid increasing bank costs, because of their small profit margins.
"Not only gas station attendants, but merchants who are using small margins recognise that, unless they use cash, it will cost them repeatedly... We can't do that to our citizens," he warned.
Jackson agreed with Chuck, suggesting an incremental increase, starting at $1.5 million, would create a better balance.
"There ought to be some balance... Let us not guarantee increased revenues for institutions (banks) that can do without it at this time," the Government MP said.
Hylton agreed with Chuck that the $500,000 was "chicken feed" in today's business economy, noting that people who "throw partner" and other similar saving instruments often account for more cash than that.
Samuda questioned how the Government will follow the link between people withdrawing funds from their bank accounts, and using it for money laundering or terrorism acts.
Henry suggested that the limit be put at US$10,000 or the equivalent of that figure, while Warmington, the only member who voted against the eventually compromised limit, insisted it should be no less than $1.5 million.
Bunting, in closing the debate, said that being compliant with the CFATF's requirements would make things easier for the local banking sector.
The Bill is to be tabled in the Senate on Friday.