Subagent questions BOJ’s handling of AFSL
A Mandeville-based sub-agent of Alliance Financial Services Limited (AFSL), which operated a MoneyGram franchise on behalf of the entity, has raised issue with the way in which Bank of Jamaica (BOJ) suspended cambio and remittance services offered by AFSL and its sub-agents.
Earlier this month, the BOJ rescinded the licences it issued to AFSL to operate cambios and remittance due to charges laid against the company’s principals, Peter Chin and Robert Chin. Both men have been slapped with charges for failure to file threshold transaction reports, as mandated under the Proceeds of Crime Act, for transactions exceeding or equal to US$15,000 (or its equivalent in any other currency) to the Financial Investigations Division (FID).
However, the sub-agent, who chose not to be identified, believes that the central bank “acted in such a unilateral and heavy-handed way” and could have forewarned sub-agents of the decision or acted in a different manner.
“We, the sub-agents, have nothing to do with the charges that are being levelled against the principals of Alliance. We are independent operators across the island but because Alliance is our primary agent, the suspension has affected us as well,” the sub-agent contended.
“They could have done it a different way. They could have appointed a special manager to oversee the operations until the matter is settled in court, so that at least we could get back to work,” the sub-agent added.
While emphasising that the BOJ could have explored alternative measures to ensure that sub-agents are operational, the MoneyGram operator accused the institution of acting in a calculated manner, noting that the central bank’s motive has “ruined December and put everybody out of business”.
The sub-agent also asserted that the decision would have far-reaching impact on not only other MoneyGram operators who were sub-agents of AFSL, but also their employees who could possibly be out of jobs.
“Fortunately, I have another remittance that I can rely on that I can at least pay the bills. But other sub-agents…maybe MoneyGram is all they do,” the business owner stated.
Asked how much the business would have lost from the closure of MoneyGram, the sub-agent said about 70 per cent of revenues.
He also questioned why the BOJ decided to shutter AFSL’s remittance and cambio businesses, which are a different division from the investments, where the charges arose.
“The most important thing is that nobody has been found guilty in a court of law yet, but there is no presumption of innocence and there is no due process,” the business owner said.
In response to the sub-agent’s concerns, Natalie Haynes, the BOJ deputy governor with responsibility for banking & currency operations & financial markets infrastructure, countered the complaints of the sub-agent.
“If Alliance is no longer authorised to offer a service, the sub-agent cannot offer the service, because they are not independent of Alliance. Those sub-agents are not in an arrangement in terms of licence. They only get a licence for the location but the licence is issued to Alliance,” she told Caribbean Business Report.
With regard to informing sub-agents of the central bank’s decision to withdraw licences from AFSL, the BOJ deputy governor emphasised that since sub-agents do not have a licence, they have no legal standing with the bank and so the institution is not obligated to communicate.
“The sub-agents pay the BOJ no fees. Alliance pays the BOJ annual fees for the licence, The BOJ has no arrangements with sub-agents,” she reiterated.
Instead, Haynes recommended that sub-agents consider entering into agreements with other primary agents to continue operating their MoneyGram outlets.