By Susan Smith, Staff ReporterSINCE THE start of this year, the most updated information from the Bank of Jamaica (BoJ) reveals that 17 cambios have ceased to operate. Thirteen of these were claimed to be by voluntary decisions. Four had their licences suspended by the Bank of Jamaica. Within the last week, cambios have attracted the attention of the police. The BoJ still holds them to the Money Laundering Act as it seeks to ensure that they abide by strict and prudent practices.
Mr. Earle Harriott, managing director of Mirabay Resort, a former president of the Cambio Association of Jamaica and former operator of 10 recently-closed cambios, thinks its unfair for cambios to be associated with unscrupulous offences. "What I am seeing with the cambios and the allegations levelled against them are not deserving," he complained.
UNFAIR LINK
Mr. Harriott was among those dealers who voluntarily gave up their cambio licences. He finds it difficult to accept that the word 'cambio' is now associated with illegal money when it is a legal business that is licensed by the BoJ. "It is unfair to link black market business with cambios which consist of such distinguished dealers as DB&G and FX Trader."
There are no indications that the Bank of Jamaica has forced the hands of persons like Mr. Harriott to give up their licences. Mr. Harriott said his decision was based on his retirement plans. A spokesperson at the BoJ speaking with the Financial Gleaner yesterday said: "He closed down his business and is going into something else full time. In accordance with the existing regulations he has to come out of the business."
Mr. Harriott said the intention was to sell the business but it was a bit difficult to do so because getting an operator to inherit the business does not just happen overnight. It is a process of investigation by the BoJ which could be lengthy. "One has to be very qualified to get a cambio licence from the BoJ. One has to get the fit and proper certification from the BoJ."
Mr. Harriott stressed the importance of having an impeccable financial record from the BoJ.
"A thorough examination of your business dealings and transactions are all considered in order to obtain this certification," he said.
BRANCHING OUT
President of the Cambio Association of Jamaica, Mr. Allan Morrison, says that cambios are not as viable as they once were. "We are complying with the money laundering procedures and it increases your administrative demand so it's another cost to your business.
"You have to hire staff to do the checking, especially with the money laundering aspect. If a dealer earns $100,000 in Kingston, he might earn a margin of one per cent which works out to be $1,000 profit."
Mr. Morrison noted that the new trend of cambios is to branch out into other areas in order to supplement the marginal loss. "When the dollar fluctuates that's when the cambio makes money but right now with a relatively stable dollar the margins are small, especially during this year."
Mr. Harriott praises the cambios for their contribution to the financial sector. "It has contributed to building positive parts of the financial landscape." He attributed an open foreign exchange market and a stable exchange rate to the success of cambios.
"Cambios made foreign currency accessible to people who years ago could not access it at many of the merchant banks."
