The Bank of Jamaica (BOJ) has defended its decision to suspend the cambio and remittance operating license of Alliance Financial Services Limited (AFSL) and revoke the authorization granted to the firm to operate as a payment service provider.
The bank explained that this action was necessary, following regulatory breaches by the company, which threatened good order in the foreign exchange market and payment systems, as well as the reputation and good standing of the Jamaican financial system internationally.
In a statement, the BOJ said it takes note of the recent court decision in the matter involving affiliate company, Alliance Investment Management Limited (AIML), which is not a licensee of the bank, as well as of public commentary related to the actions taken by the bank in 2021.
The bank explained that its regulatory actions became necessary after the Financial Investigations Division (FID) charged AFS, affiliated company Alliance Investment Management Limited (AIML), and its two principals, President Peter Chin and his brother, Vice President Robert Chin, with several offenses.
The charges relate to breaches of the Bank of Jamaica Act, the Banking Services Act, and the Proceeds Of Crime Act (POCA).
The BOJ stressed that it was only after formal charges were laid following the requisite ruling by the Office of the Director of Public Prosecutions that it took the regulatory action of the suspension of licenses to safeguard the financial system.
It said the formal charging of the entities and their principals raised serious “fit and proper” considerations for their continued operation of financial services under the Bank of Jamaica Act and the Banking Services Act.
The BOJ noted that Alliance Finance Limited subsequently pleaded guilty in the St. Andrew Parish Court to several breaches of the Bank of Jamaica Act and the Banking Services Act and was fined.
It said these breaches, for which AFL was convicted, related to “carrying on the business of lending in foreign currency, in breach of the Bank of Jamaica Act” and “accepting deposits without the requisite license, in breach of the Banking Services Act.”
It said these represent breaches of the substantive framework of financial services, regulated by the Central Bank.
One consequence of such breaches is being rendered unfit to own and operate financial services in the financial system.
The BOJ said it is also aware of legal action initiated in the Supreme Court by the FID related to criminal forfeiture regarding the offenses for which AFL was convicted in relation to the Bank of Jamaica Act and the Banking Services Act.
It maintains that its actions taken regarding AFL were necessary.
The BOJ said it is important to note that its regulatory actions were the subject of judicial review, and finding in the bank’s favor, the Court of Appeal noted that “the risk to the financial sector outweighed the economic loss and inconvenience AFL may have suffered.”
The BOJ added that it remains committed to fulfilling its mandate to ensure the stability of the Jamaican financial system and the effective and impartial supervision of its licensees.
The actions of the BOJ are not related to the affiliate company, Alliance Investment Management Limited (AIML).
That matter is the one that was recently ruled on by the court, resulting in the Chin brothers being freed of criminal charges under POCA.
