The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas' ambitions to develop a legalised medical marijuana/hemp industry cannot be held hostage by the banking industry's concerns, an ex-Democratic National Alliance leader is arguing.

Branville McCartney, under whose leadership the DNA made legalising the sector a 2017 general election campaign issue, told Tribune Business that the well-being of the Bahamian people and their economy took priority over fears that the banks might lose their cherished US correspondent relationships.

"We need to do things in this country, and ensure the laws in this country are beneficial for this country, and not for the banks whether they are local or internationally owned," he argued.

"Those banks are making a hell of a lot of money in this country. If they want to be here, they need to follow our laws, and those laws need to be predicated on what's best for our country. If they won't do that, bye bye."

Suggesting that Bahamians were not benefiting from the commercial banking industry as presently structured, Mr McCartney added: "We need to be more prepared in this country to take a stand and move this economy forward for the benefit of the Bahamian people and not the benefit of foreign entities that come to this country.

"This administration needs to do what's best for this country. As a government they can do it; change and amend the laws, and do it for the benefit of this country, the economy and the Bahamian people. Look at where we are today: What do we have to lose? The banks will fall into line. I can almost guarantee you that. They make too much money here to turn their backs on it."

Mr McCartney spoke out after several bankers warned that The Bahamas cannot afford to be cut-off from the US financial and economic system by the industry losing its correspondent relationships with counterparts in that nation due to concerns about a legalised industry conflicting with US federal law.

Many US states have legalised marijuana, especially for medicinal purposes, and community and state banks accept its monies. However, US federal law largely prohibits any activities associated with its cultivation and use, and it is this which governs the major American and multinational banks who hold the correspondent relationships with their Bahamian counterparts.

As a result, Gowon Bowe, Fidelity Bank (Bahamas) chief executive, and Kenrick Brathwaite, the Clearing Banks Association's chairman, revealed they were bluntly warned last year that Bahamian commercial banks could lose these ties if they accepted clients or deposits from a marijuana industry and its players even if they were legalised under this nation's laws.

Losing these correspondent banking relationships would effectively bring the Bahamian economy to a grinding halt, as it would be cut off from the US dollar currency sources that are vital to the conduct of this nation's international trade and paying for its imports.

As a nation that imports virtually all it consumes, with most goods originating from or transiting the US, access to US dollars through these ties is vital for Bahamian companies and individuals to execute and clear these transactions.

Access to US currency, and such clearing and settlement facilities, is exactly what is provided by these correspondent relationships, meaning in effect that correspondent banking is the glue that binds the Bahamian economic system together and lubricates its international business centre model.

However, one way around these US concerns would be to create a local bank that transacts in Bahamian dollars only to accept deposits from a legalised medical marijuana/hemp industry.