So we will just attempt 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, especially Eastern Caribbean countries. So, I guess the question that I have is, all six countries of the Organization of Eastern Caribbean States are members of the Bolivarian Alliance understood as ALBA, that includes efforts to promote regional cooperation and ease poverty; so to what degree have ALBA and Petrocaribe increased Venezuela's impact in the Caribbean? I believe I can respond to that question significantly.
Mr. Farnsworth. Mr. Chairman, thank you. And I agree it is the pregnant concern if you will of the region. Venezuela is a country that is in collapse. Financially, some are saying it is no longer a democracy. It is a nation that has extreme and long lasting internal problems 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 actually ended up being stretched, due to the fact exit timeshare that the largesse that Venezuela has actually had the ability to honestly provide away or to provide a concessionary on concessionary terms has actually been much constrained in the existing environment.
I think what I would state remains in the present environment, since of the difficulties that Venezuela is having and frankly due to the fact that of the opportunities that we have in the United States through the entire revolution of energy that we have actually seen in our own country over the last numerous years, we have a chance to come into wesley financial group, llc the Caribbean as a partner and say, look, you understand the programs and the activities that you may have been doing with Venezuela are no longer relevant and we can provide the exact same things that you require without the political or without the ideological overhang that you may have had formerly - Accounting vs finance which is harder.
Duncan. Let me ask you something about that. Exists enough trust of the United States for us to step into that void with those nations? I don't understand the answer to that. Mr. Farnsworth. Well, I think in the existing environment we require to https://diigo.com/0o7s9i do some groundwork. We need to do some spade work. I imply, look, Petrocaribe was a really effective program and we comprehend why. I indicate, it was prompt, it offered something that the leaders required when they required it. It was symbolic. It was really, really simple to describe to individuals. I suggest, we are getting oil from Venezuela.
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It was on one problem. And I think sometimes, when the United States engages with the nations of the Caribbean, we have a great deal of well meaning programs and fantastic ideas, however they are diluted, right? Not misguided, but watered down in regards to the effort and the focus. Under Petrocaribe, it was one product quickly explained, extremely symbolic, and people said Venezuela's our friend - How old of an rv can you finance. And I think 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. What does etf stand for in finance.
Mr. Duncan. I personally think energy is a terrific opportunity for us, no doubt about that. Let me look into cash laundering and terrorism funding a little bit. There is a huge push by the U.S. to have U.S. banks sever relationship with Caribbean-based banking institutions. Does that policy work to lower money laundering and chances for terrorist companies to access the financial system? And that is probably to Sally. Ms. Yearwood. In a great deal of ways it does the opposite, since once U.S. banks vacate the region what you have actually produced in truth is a space which ends up being filled by other institutions.
So, what is being developed is a situation where there is more chance for terrorist financing or something to fail and somebody to exploit that space. So I would state that the U.S. banks definitely require to be a crucial and essential gamer in the regional cash system. Mr. Duncan. I am most likely less concerned, and maybe I should not be, however less concerned about terrorism funding through the Caribbean banks as I have to do with money laundering. What happened to household finance corporation. We simply saw in Panama, a substantial $800 million cash laundering plan, realty involvement, big number of staff members associated with a genuine organization-- still a cash laundering plan.
Ms. Yearwood. Part of the issue is the perception of risk versus the reality of the threat. Banks are not leaving the Caribbean due to the fact that there is money laundering. Banks are leaving the Caribbean due to the fact that the costs of compliance are extremely stacked versus the banking system. You have little jurisdictions and for every single account that you are handling you have to put a substantial quantity of cash into making certain that the expense of-- that the organizations is tidy. However what we need to do in impact is produce a system where the regulators, the banks, everyone is interacting, information is being shared, and when info is passed between the regulators and the Treasury or the regulators and the banks, people know where the voids are.
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And the problem in the Caribbean is that the economies are little, putting these systems in place costs a lot, but all the Caribbean will tell you that they meet the compliance regulations. And so there is a disconnect in between what is really taking place and what people are saying is occurring. I believe among the typical grievances is the breakdown between what is going on in overseas monetary services and what is going on in banking. And the Panama Documents were really largely connected to the offshore monetary services industry versus the correspondent banking and de-risking issue that is currently being dealt with.
Mr. Duncan. I am presuming that the Federal Government is keeping an eye on-- in Panama Papers an individual is never ever linked in that and start shifting monetary resources around, in perhaps, the Caribbean nation. I am assuming our Treasury and FBI are monitoring that, I would assume. So I am going to go on and yield to 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 utilizing it for political function. You understand, if you take a look at the votes they took at the U.N.
So now Venezuela is in problem. I think 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 truly help in terms of just having a bit more affect on individuals. The other thing that worries me is that on the eastern part of the Caribbean. Essentially, 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 just wondering how much of a competitive downside this puts us when we do not have, truly, a presence in the Eastern Caribbean.