Schotte’s turning point
Former Prime Minister of Curaçao, Gerrit Schotte, and his partner are suspects in a case of money laundering and forgery, dubbed Babel. The former Prime Minister and his partner are awaiting trial after a postponement in January.
This money laundering prosecution is landmark in the history of Curacao’ financial services industry. So far, no one has ever been prosecuted or convicted. “The International Narcotics Control Strategy Report Volume II, Money Laundering and Financial Crimes (March 2014 and updates)” reports for Curacao: “Money Laundering Criminal Prosecutions: Prosecutions 0, Convictions 0, (Page 95).” In spite of 13,553 UTR’s (Unusual Transaction Reports, locally known as MOT,) last filed on December 9, 2013, Schotte is the only case prosecuted.
The entire industry is suspect according INCSR, onshore and offshore banks, saving banks, money remitters, credit card companies, credit unions, life insurance companies and brokers, trust companies and other service providers, casinos, customs, layers, notaries, accountants, tax advisors, jewelers, car dealers, real estate agents and administration offices.
The efforts of financial services industry to control itself are highly praised. Curacao is member of the Caribbean Financial Task Force (CFATF), etc., but The UN Convention against Transnational Organized Crime and the UN Conventions against Corruption have not been extended to Curacao.
Mr. Ronald van Raak, Member of Parliament of the Netherlands in charge of Curacao’s affairs, estimates that the island of Curacao processes at least Nafl. 726 million per year (Nafl. 361 million, GCB, Gaming Control Board, and Nafl 365 million FWNK), or Nafl 2 million per day in casinos and lotteries only, more or less Nafl. 40 per household (50,000 households) per day. Gambling may be popular amongst locals but it is unlikely that these numbers apply to the entire general population.
The payout rate of most lotteries and casinos is about 85-90%, and thus, the gambling set-up is an ideal way to launder cash money in large amounts, at the expense of only 10-15%.
This shadow economy comprises at least 20-30% of the total and is indispensable for the welfare of the island. Eliminating it would be “killing the goose that lays the golden eggs.” Nevertheless, money laundering is an international crime and the negative image for the island is extremely detrimental to the financial service industry.
The enormous challenge for the present government is to improve Curacao’s international image as a financial center, to reduce crime and, most of all, violent crimes, and to bring at least a part of the shadow economy into full sunlight.
Many moral crusaders advocate, “throwing away the baby with the bathwater.” It is not likely that such operation will be successful, to the contrary, undoubtedly; a new layer of shadow economy will immediately emerge. Too many people’s daily income depends on it.
So, Minister of Finance, Jose Jardim and Central Bank civil servants, please put on your thinking cap, and come with workable solutions. The island needs it.
By Jacob Gelt Dekker, opinion columnist for Curaçao Chronicle.