Politically Exposed Persons (PEPs) are classified as those people who are current or former government officials and may include heads of state, individuals working in the executive, administrative, legislative, military or judicial branches in elected or appointed positions. It also includes senior officials of political parties and their immediate families including their spouses, parents, siblings, children, and spouses’ parents and spouses’ siblings. It includes individuals serving in senior executive roles such as chairpersons, directors, board members and senior executives in government-owned commercial enterprises or international organizations. This classification is based on the guidance issued from the Financial Task Force (FATF) who defines a PEP as an “individual with a high profile political role, or who has been entrusted with a prominent public function.
PEPs represent a higher risk for financial institutions because they are more likely to become involved in financial crimes like money laundering or the financing of terrorism than other clients. Institutions conduct on-going monitoring on the accounts and business dealings with PEPs to ensure that there is nothing to indicate criminal behavior. Currently all commercial banks require the full disclosure of the origins of the monies deposited in accounts over ten thousand dollars and in the case of PEPs, deposits in any amount may randomly be questioned and sources of funds must be declared to the Central Bank. Insurance companies have recently begun to require disclosure of sources of funds in order to insure homes and vehicles from PEPs.
Recent allegations of financial wrongdoing revealed in the Auditor General’s report cite that close to half a million dollars have been misappropriated and syphoned from the National Sports Council. The backlash has caused the recall of Herman Longsworth from his post of Counsel General in New York. Longsworth was previously Minister of State in the Ministry of Sports. Other more serious allegations are that Ministers of this Government of Belize (GOB) were guilty of receiving twenty five thousand US dollars monthly paid as bribes. The big question, is how bank transfers were and deposits made for these substantial quantities without triggering investigations from the Central Bank of Belize or the Financial Intelligence Unit (FIU). These Politically Exposed Persons were allowed to amass fortunes in cash and properties without hindrance or encumbrances.
The Normal Belizean, the peasants, heck…even the tacos lady on the corner must pay their fair share of General Sales Tax (GST), business tax and income tax. The abovementioned $25,000 US monthly income was clearly not disclosed, its provenance unknown. There are clearly two violations which must be investigated, the first has to do with the sources of the income. If the source is illegal then there must be charges of money laundering. A second investigation has to do with taxes and tax evasion. There are urban legends that tell of a simple pool table repairman who uses his socks to store money and of the poor humble fisherman who can now afford to jet set around the world. These horror tales tell of the policeman who now owns a gas station, and radio station or how about that shady agriculture extension officer who once stole piglets to make ends meet but can now declare over $3M in assets before the Integrity Commission. There are stories of an ex minister and his family who own an entire village. There needs to be an urgent investigation by the Tax Office on the sources of the income used to purchase these assets, and efforts must be made that all outstanding taxes be paid to Belize.
Last week we were offered a box of chocolates, and sure there were bound to be one or two full of nuts. This week, it seems we had another box, Pandora’s Box flew open and the evil contents are laid bare. It might be that FIU and Central Bank are again remiss in their duties of oversight in these matters. The Tax authorities are newly organized and equipped following another loan worth millions on the backs of tax payers. Therefore, they must tackle in earnest the task of ensuring that every Belizean regardless of socio-economic standing or high political profile must pay their due taxes. We must demand no less. It is said that the only thing left in Pandora’s Box is hope. We must cling in these dark times, to the hope that things will change for the better soon. #VOTEPUP