When West­ern Union–part of Ja­maican con­glom­er­ate GraceKennedy–an­nounced in Feb­ru­ary that it was plac­ing re­stric­tions on the amount of for­eign ex­change it would be able to re­mit to coun­tries abroad, it was on­ly nat­ur­al to rea­son that the mon­ey trans­fer busi­ness was now ex­pe­ri­enc­ing the ad­verse ef­fects of a con­trac­tion in the avail­able sup­ply of for­eign ex­change.

Fast for­ward to May and those ini­tial re­stric­tions have been ful­ly re­moved.

In an ex­clu­sive in­ter­view with the Busi­ness Guardian, Don­ald Ed­wards, coun­try man­ag­er for GraceKennedy T&T, and Noel Green­land, vice pres­i­dent, mar­ket­ing and op­er­a­tions for GraceKennedy Mon­ey Ser­vices (based in Ja­maica), dis­cussed the cur­rent sit­u­a­tion in the lo­cal and glob­al re­mit­tance busi­ness, how West­ern Union is treat­ing with the do­mes­tic for­eign ex­change sit­u­a­tion, and the im­pact of tech­nol­o­gy on the mon­ey trans­fer busi­ness.

The re­mit­tance busi­ness plays a crit­i­cal role in sup­port­ing the fi­nan­cial needs of many peo­ple through­out the Caribbean re­gion and, more specif­i­cal­ly, in this coun­try.

Thus, when West­ern Union in­sti­tut­ed lim­its on the amount of for­eign ex­change it would be able to re­mit abroad (US$200 to be ex­act) ad­di­tion­al bur­den ap­peared to be placed on those who need­ed re­mit­tances to sus­tain their busi­ness­es, ed­u­ca­tion or liveli­hood.

Asked why the re­stric­tion was in­tro­duced in Feb­ru­ary, Ed­wards said: "We have al­ways op­er­at­ed in an open mar­ket where we would have been able to trans­fer any amount of mon­ey up to US$7,500 in the past.

"Com­ing along the pe­ri­od of Feb­ru­ary in­to March, we be­gan to ex­pe­ri­ence re­al chal­lenges in the sup­ply of for­eign ex­change as is a well known sit­u­a­tion that ob­tains in T&T to­day. As a re­sult, we had no choice but to lim­it the trans­ac­tion val­ues that we would send abroad."

Ed­wards point­ed out, how­ev­er, that the re­stric­tion was not as some may have thought it to be.

"To be clear, it seems as though there was some con­fu­sion as to what the US$200 lim­it meant.

"The lim­it on the trans­ac­tion was re­al­ly a lim­it on the TT-dol­lar equiv­a­lent of that amount. Per­sons who had US dol­lars that they wished to re­mit could bring it in and we would send it up to our US$7,500 max­i­mum. But, for in­di­vid­u­als con­vert­ing their TT dol­lars to US to trans­fer abroad, the US$200 dol­lar lim­it­ed was put in place."

In what ap­peared to be an about-turn, in May, all re­stric­tions on the amount of mon­ey that could be re­mit­ted was re­moved. This begged the ques­tion as to why the US-dol­lar lim­it was re­duced to US$200 in the first place and what caused West­ern Union's ap­par­ent re­ver­sal.

Ed­wards said: "When the lim­it was in­sti­tut­ed, it was as a re­sult of us hav­ing a prob­lem in sourc­ing for­eign ex­change to meet our oblig­a­tions to our par­ent com­pa­ny (GraceKennedy Mon­ey Ser­vices). We would have been able to send mon­ey and go on the mar­ket and pur­chase for­eign cur­ren­cy from com­mer­cial banks. As a re­sult of the eco­nom­ic sit­u­a­tion and, in par­tic­u­lar, the chal­lenges faced by the banks vis-�-vis for­eign ex­change, we weren't able to do so (set­tle our oblig­a­tions to the par­ent com­pa­ny). As a re­sult, trans­ac­tion lim­its had to be put in place.

"What sub­se­quent­ly hap­pened was the mon­ey we would have been short on to ful­fill our oblig­a­tions, we were able to set­tle those amounts and that is what has al­lowed us the abil­i­ty to of­fer the re­stric­tion-free ser­vice to the cus­tomers."

Green­land added that de­spite the in­sti­tu­tion of the lim­it, at no point did West­ern Union stop send­ing mon­ey abroad.

He said: "When one looks at the re­mit­tance busi­ness in Trinidad where there is a short­age of for­eign ex­change, lim­its had to be put in place. How­ev­er while oth­ers re­strict­ed and pre­vent­ed the send­ing of mon­ey in any amount, West­ern Union did not do that. We con­tin­ued send­ing.

"So, while the eco­nom­ics of the day drove cer­tain de­ci­sions, most im­por­tant­ly our busi­ness was still open to send and re­ceive mon­ey."

Asked about any fu­ture oc­cur­rence of re­stric­tions on re­mit­tance amounts, Ed­wards said they have con­fig­ured their op­er­a­tions to en­sure the in­flows and out­flows of for­eign ex­change are suf­fi­cient­ly man­aged.

"As of to­day, the way in which the busi­ness is now man­aged, we have put mea­sures in place to re­duce our de­pen­den­cy on the com­mer­cial banks to meet our oblig­a­tions and, as a re­sult, ease any pos­si­ble fu­ture bur­dens on our cus­tomers," said Ed­wards.

One el­e­ment that stood out in West­ern Union's de­ci­sion to place re­stric­tions (and then re­move them) on the funds that could be sent abroad was its treat­ment of Chi­na and Colom­bia.

For the pe­ri­od when the lim­its were in­sti­tut­ed, re­mit­tances to Chi­na and Colom­bia were re­strict­ed where­by West­ern Union would on­ly ac­cept US dol­lars to cater to those re­mit­tances. (Ini­tial­ly, per­sons could bring TT dol­lars that would be con­vert­ed to US dol­lars to re­mit to Chi­na and Colom­bia).

Ques­tioned about its po­si­tion with re­spect to Chi­na and Colom­bia, Ed­wards said: "We al­ways trans­ferred mon­ey to Chi­na and Colom­bia us­ing US dol­lars. They would have been able to bring US in­to our lo­ca­tions for re­mit­tance pur­pos­es.

"What we re­strict­ed was the ac­cep­tance of lo­cal cur­ren­cy (TT dol­lars) for the pur­pose of send­ing abroad be­cause of changes we were mak­ing to our sys­tem to fa­cil­i­tate the ease of trans­ac­tions to cater to these coun­tries."

Go­ing fur­ther he said: "It was re­al­ly a func­tion of cre­at­ing some ad­just­ments in our soft­ware to man­age the flow of funds in our lo­cal cur­ren­cy. We al­ways al­lowed for them to con­tin­ue send­ing in US dol­lars."

When asked if the flow of funds to Chi­na and Colom­bia were larg­er than any of the oth­er re­mit­tance cor­ri­dors, Green­land said, "The Chi­na and Colom­bia cor­ri­dor is not un­usu­al in be­hav­iour to any of the oth­er re­mit­tance cor­ri­dors we deal with. All that took place was just us pro­vid­ing an up­grade to our sys­tem to ful­ly cater to both the TT and US dol­lars for re­mit­tance pur­pos­es."

In re­cent years, the in­tro­duc­tion of com­pli­ance stan­dards around the globe to treat with mon­ey laun­der­ing and ter­ror­ism fi­nanc­ing has seen a marked change in the way fi­nan­cial in­sti­tu­tions treat with cus­tomer in­for­ma­tion and da­ta col­lec­tion. Un­doubt­ed­ly, the re­mit­tance busi­ness has been af­fect­ed by such weighty reg­u­la­to­ry changes.

Asked about this, Ed­wards said: "We be­lieve that the var­i­ous forms of an­ti-mon­ey laun­der­ing reg­u­la­tions have af­fect­ed the busi­ness in a pos­i­tive way. We work hand in hand with the Cen­tral Bank and the Fi­nan­cial In­tel­li­gence Unit (FIU) in putting to­geth­er a ro­bust com­pli­ance pro­gramme and ap­ply­ing this pro­gramme to our cus­tomers."

Ed­wards said West­ern Union has in­vest­ed in tech­nol­o­gy to cre­ate ad­di­tion­al lev­els of se­cu­ri­ty and ef­fi­cien­cy to make the com­pli­ance process for cus­tomers eas­i­er.

"We have in­vest­ed in tech­nol­o­gy that cap­tures cus­tomer in­for­ma­tion–so they don't have to be repet­i­tive in pro­vid­ing the same in­for­ma­tion–and val­i­dates it at the point of en­gage­ment when do­ing trans­ac­tions."

As long as there is mi­gra­tion the re­mit­tance busi­ness will con­tin­ue to serve a crit­i­cal role in trans­fer­ring mon­ey.

Of note, ac­cord­ing to Ed­wards, is that the re­mit­tance busi­ness tends to track eco­nom­ic ac­tiv­i­ty.

"Eco­nom­ic ac­tiv­i­ty tends to be aligned to the re­mit­tance busi­ness. When an econ­o­my is as healthy as Trinidad's was, say, five years ago, you find more mon­ey be­ing sent abroad.

"Sim­i­lar­ly, when eco­nom­ic con­trac­tion sets in, you find more mon­ey com­ing in from fam­i­ly and loved ones abroad. There is re­al­ly a huge in­ter­play be­tween eco­nom­ic ac­tiv­i­ty–do­mes­ti­cal­ly and in­ter­na­tion­al­ly–and the flow of funds in the re­mit­tance busi­ness. For ex­am­ple, over a five-year pe­ri­od we moved from a de­cline of four per cent year-on-year to one per cent ahead for 2015 over 2014. Our track­ing projects four per cent ahead for 2016 over 2015 in terms of mon­ey be­ing re­mit­ted to T&T."

Asked to com­ment on the de­vel­op­ments tak­ing place and di­rec­tion the in­dus­try is head­ing in, both Ed­wards and Green­land said that In­ter­net and mo­bile tech­nol­o­gy are re­al­ly cre­at­ing new op­por­tu­ni­ties in ad­vanc­ing dif­fer­ent ar­eas of the busi­ness.

Green­land said: "Glob­al­ly, what we're see­ing are two ba­sic trends tak­ing place.

"We're see­ing more dig­i­tal ac­tiv­i­ty in the space. We're see­ing new­er play­ers com­ing in­to the mar­ket who will, no doubt, have an im­pact in the dig­i­tal realm of re­mit­tances.

"Al­so, there is a trend now where we're see­ing new­er types of trans­fers us­ing mo­bile tech­nol­o­gy. We be­lieve that mo­bile trans­fer is go­ing to be­come the norm with­in the next five to ten years. There will al­ways be a need to send or re­ceive mon­ey. The on­ly thing that will change or evolve is the method of trans­mis­sion."

GraceKennedy Mon­ey Ser­vices and West­ern Union op­er­ate un­der the fol­low­ing leg­is­la­tions:

�2 Pro­ceeds of Crime Act (POCA)

�2 Fi­nan­cial Oblig­a­tions Reg­u­la­tions 2014 (Amend­ed)

�2 Cen­tral Bank of T&T Guide­lines on Com­bat­ing Mon­ey Laun­der­ing and Ter­ror­ist Fi­nanc­ing 2011

�2 An­ti-Ter­ror­ism Act (Amend­ed)

�2 Fi­nan­cial In­tel­li­gence Unit Act (Amend­ed)

AN­DRE WOR­RELL