So we will just try to get through it and I will try to monitor it. All eyes are timeshare specialists on Venezuela today, and Venezuela's impact on the Caribbean nations from energy to trade and other things are extremely concerning, especially Eastern Caribbean nations. So, I think the concern that I have is, all six nations of the Organization of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, which consists of efforts to promote regional cooperation and minimize poverty; so to what extent have ALBA and Petrocaribe increased Venezuela's influence in the Caribbean? I believe I can respond to that question tremendously.
Mr. Farnsworth. Mr. Chairman, thank you. And I agree it is the pregnant problem if you will of the area. Venezuela is a nation that is in collapse. Financially, some are saying it is no longer a democracy. It is a nation that has severe and enduring internal problems which it is going to take years to get beyond. And so, the relationship that Venezuela has developed with a variety of nations of the Caribbean in great times has ended up being strained, due to the fact that the largesse that Venezuela has been able to frankly distribute or to supply a concessionary on concessionary terms has actually been much constrained in the current environment.
I guess what I would say remains in the existing environment, since of the troubles that Venezuela is having and honestly since of the opportunities that we have in the United States through the whole transformation of energy that we have seen in our own country over the last several years, we have a chance to come into the Caribbean as a partner and state, look, you understand the programs and the activities that you may have been doing with Venezuela are no longer appropriate and we can offer the very same things that you require without the political or without the ideological overhang that you may have had previously - What is a note in finance.
Duncan. Let me ask you something about that. Exists enough trust of the United States for us to step into that space with those nations? I don't understand the response to that. Mr. Farnsworth. Well, I believe in the existing environment we require to do some groundwork. We need to do some spade work. I suggest, look, Petrocaribe was an extremely effective program and we understand why. I suggest, it was timely, it supplied something that the leaders required when they needed it. It was symbolic. It was very, extremely easy to explain to individuals. I indicate, we are getting oil from Venezuela.
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It was on one concern. And I believe in some cases, when the United States engages with the countries of the Caribbean, we have a great deal of well indicating programs and terrific concepts, however they are watered timeshare only down, right? Not misguided, however watered down in terms of the effort and the focus. Under Petrocaribe, it was one product easily explained, highly symbolic, and people stated Venezuela's our good friend - What is internal rate of return in finance. And I believe what we require to do better from the United States' viewpoint is to construct that level of trust through an ongoing sustained engagement with the area so that people can say, look, we do trust you. Which of these is the best description of personal finance.
Mr. Duncan. I personally think energy is a terrific chance for us, no doubt about that. Let me explore money laundering and terrorism funding 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 lower cash laundering and chances for terrorist organizations to access the monetary system? And that is probably to Sally. Ms. Yearwood. In a great deal of methods it does the opposite, because as soon as U.S. banks move out of the region what you have actually created in reality is a space which ends up being 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 somebody to make use of that space. So I would say that the U.S. banks absolutely require to be a crucial and important gamer in the regional money system. Mr. Duncan. I am probably less worried, and maybe I shouldn't be, but less worried about terrorism financing through the Caribbean financial organizations as I have to do with money laundering. How many years can you finance a boat. We just saw in Panama, a huge $800 million cash laundering plan, genuine estate involvement, substantial number of staff members associated with a genuine company-- still a cash laundering scheme.
Ms. Yearwood. Part of the problem is the understanding of risk versus the truth of the danger. Banks are not leaving the Caribbean since there is money laundering. Banks are leaving the Caribbean since the costs of compliance are overwhelmingly stacked against the banking system. You have small jurisdictions and for each account that you are dealing with you have to put a huge quantity of money into making certain that the cost of-- that business is tidy. However what we have to perform in effect is develop 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 issue in the Caribbean is that the economies are little, putting these systems in location costs a lot, but all the Caribbean will inform you that they satisfy the compliance policies. Therefore there is a disconnect in between what is really taking place and what people are stating is occurring. I think among the common complaints is the breakdown between what is going on in offshore monetary services and what is going on in banking. And the Panama Papers were very mostly connected to the offshore monetary services industry versus the correspondent banking and de-risking issue that is presently being dealt with.
Mr. Duncan. I am presuming that the Federal Government is keeping an eye on-- in Panama Papers a person is never ever linked in that and start moving financial resources around, in potentially, the Caribbean country. I am presuming our Treasury and FBI are keeping track of that, I would presume. So I am going to proceed and yield to the ranking member. Mr. Sires. Among the factors that I supported, or I still support the export of energy from this nation is Learn more here to balance out the impact of Venezuela since generally they were utilizing it for political purpose. You understand, if you look at the votes they took at the U.N.
So now Venezuela is in difficulty. I believe their production is something like 40, 50 percent less, and there is a void there that we can assist fill and, you understand, we can really assist in terms of simply having a little bit more affect on individuals. The other thing that stresses me is that on the eastern part of the Caribbean. Generally, we have an Embassy in Barbados and it serves all those islands there. Meanwhile, you have Venezuela, Cuba, Brazil, they all have a presence there. So I was simply wondering just how much of a competitive downside this puts us when we do not have, really, an existence in the Eastern Caribbean.