In his monetary policy announcement presentation in Chaguanas two Monday's ago, Central Bank Governor Jwala Rambarran described foreign exchange as "another murky matter that has grabbed headlines for most of the year."
The Governor said that foreign exchange had been turned into a murky matter by some with agendas and others who pretend to be ignorant about how our system works
He pointed out that the demand for foreign exchange has expanded and changed over the last two decades with "new patterns of consumer spending" for example the use of credit cards to make online payments.
And he noted that foreign credit card purchases had "devoured" US$570 million for the first 11 months of the year, the acquisition of new cars "many of which are higher-end luxury vehicles has accounted for US$205 million for the year so far and that there was US$3.3 billion in foreign exchange accounts.
The Central Bank leader also spoke about the "legitimate requests" of businesses that the institution has met by taking US$1.7 billion from the country's reserves.
Having set the background, the governor then said that that the foreign exchange story gets even murkier because "there are many business leaders who often give their opinions freely on foreign exchange, many go to the media and have been extremely vocal on the matter."
In what was the really important aspect of his speech on this issue, Mr Rambarran then said: "We have noticed a trend where businesses make noise for foreign exchange to pay bills for trade-relate purposes and actively lobby the authorized dealers and Central Bank for US dollars.
"When the money is provided, the funds are promptly deposited in their foreign exchange accounts and left unused and the noises about not being able to get money for business continue.
"I do have one tip for businesses trying to get foreign exchange: it helps if you don't conduct business with companies with terrorist links as we have strict laws on Anti-Money Laundering and Combatting the Financing of Terrorism."
Now, Governor Rambarran's statements raise several important issues:
�2 The pointed reference to the fact that the Central Bank has "noticed a trend" seems to suggest that this is a pattern of behaviour that the institution has observed for some time and that is becoming more commonplace;
�2 That the Central Bank has observed a correlation between some of the businessmen who complain about the unavailability of foreign exchange and those who are buying foreign exchange and depositing it into their foreign exchange accounts,
�2 The suggestion that some businesspeople are being dishonest in applying for foreign exchange to pay bills and then depositing the money into a foreign exchange account;
�2 The absolutely intriguing suggestion that some of the people who are parking their funds in this manner may be conducting (or attempting to conduct) business with companies that have terrorist links.
One must assume that a Central Bank Governor would not have raised the issue of local companies attempting to do business with foreign companies that have "terrorist links" unless he had cogent and compelling evidence that such practices are taking place.
If this is in fact the case, one imagines that some communication has taken place with the officials at the Financial Intelligence Unit, especially that institution's head Susan Francois.
If Mr Rambarran were in fact just providing his audience of Chaguanas businesspeople with some friendly advice, why would he have placed this "tip" right after his reference to businesspeople parking foreign exchange in their foreign exchange accounts?
The absolutely pertinent question that the Governor may choose to answer is whether he has a list of companies or persons who are getting foreign exchange and promptly depositing it into their foreign exchange accounts?
If Mr Rambarran is suggesting that these businessmen are doing something illegal, unethical or immoral, then how does he propose to use the considerable resources at his disposal to address or reverse this situation?
Or is he simply expressing his disapproval of the fact that those who are making the most noise about the lack of foreign exchange are not using the money for the purpose stated in their applications?
The Governor is quite right that T&T has strict anti-money laundering and terrorist financing laws.
What he did not say is that the Central Bank has a responsibility to ensure that all of the financial institutions it supervises comply with anti-money laundering requirements.
On the Central Bank's website is this statement: "The Financial Obligations Regulations 2010 (the FOR) names the Central Bank of Trinidad and Tobago (the Central Bank) as a Supervisory Authority for the financial institutions that it regulates.
"As such, the Central Bank is responsible for ensuring that licensed institutions under the Financial Institutions Act 2008, registrants under the Insurance Act Chap 84:01, the Home Mortgage Bank, bureaux de change, and money remittance businesses comply with Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) legislative and regulatory requirements.
"In addition, as part of its regulatory function, the Central Bank issues Guidelines and Circular letters which provide guidance to the industry in respect of anti-money laundering and counter terrorist financing on processes, systems and other practices to ensure compliance with the legislation."
The anti-money laundering guideline published by the Central Bank in October 2011 notes that the Proceeds of Crime Act requires financial institutions to "pay attention to and report if suspicious, business transactions which are large, unusual, complex as well as transactions which have no apparent economic or visible lawful purpose, those undertaken with persons and transactions with financial institutions in or from other countries which do not or insufficiently comply with the recommendations of the Financial Action Task Force.
So local financial institutions have a responsibility to report all suspicious activities to Financial Intelligence Unit and the Central Bank has a responsibility to ensure that all financial institutions are compliant.
It is also clear that T&T is under some pressure from the international community to ensure that its anti-money laundering efforts result in some prosecutions.
The tenth follow-up report on T&T of the Caribbean Financial Action Taskforce, published in May this year, stated: "With regard to Recommendation 1, the only outstanding deficiency is the fact that the implementation of the money laundering legislation does not appear to be effective as there have been no convictions.
"The authorities have advised that measures are being considered to address problems in the effectiveness of the criminal justice system. These measures include legislation to abolish preliminary enquiries in indictable offences. Efforts are being made to increase the number of judicial officers and there is a move towards the increasing use of plea bargaining. Such measures should enhance the speed and efficiency of criminal trials. Nevertheless, the situation has remained unchanged therefore resulting in this recommendation not being fully compliant."