Any­one walk­ing through T&T's cap­i­tal, Port-of -Spain, or any of the coun­try's oth­er towns, would be struck by the num­ber of shops that have no­tices on their front win­dows ad­ver­tis­ing the sale of US cur­ren­cy.

The prac­tice of re­tail shops ad­ver­tis­ing the sale of US cur­ren­cy has be­come so per­va­sive that it has ex­tend­ed be­yond ur­ban ar­eas to small shops in sub­ur­ban and rur­al dis­tricts.

What these shopown­ers may not know is that this wide­spread prac­tice is il­le­gal and the sale or pur­chase of for­eign cur­ren­cy by any per­son or en­ti­ty who has not been au­tho­rised by the Cen­tral Bank is a crime that can re­sult in a fine, im­pris­on­ment and the con­fis­ca­tion of the for­eign cur­ren­cy.

In May last year, the Cen­tral Bank pub­lished a no­tice in which it ad­vised the pub­lic that "trans­ac­tions in­volv­ing the buy­ing, sell­ing, bor­row­ing or lend­ing of for­eign cur­ren­cy should on­ly be con­duct­ed through au­tho­rised deal­ers."

The Cen­tral Bank no­tice list­ed the 12 au­tho­rised for­eign ex­change deal­ers:

RBC Roy­al Bank;

Re­pub­lic Bank;

Sco­tia­bank;

First Cit­i­zens Bank;

Citibank;

First­Caribbean Int'l Bank;

Bank of Bar­o­da;

JMMB Bank;

NCB Glob­al Fi­nance;

ANSA Mer­chant Bank;

De­vel­op­ment Fi­nance and

Massy Fi­nance GFC.

Ad­di­tion­al­ly, ac­cord­ing to the Cen­tral Bank no­tice, there are five bu­reaux de change that are au­tho­rised to buy or sell for­eign cur­ren­cy notes, coins and trav­ellers cheques on­ly.

The five au­tho­rised bu­reaux de change are:

East­ern Cred­it Union;

Glob­al Ex­change T&T;

GraceKennedy;

Mil­len­ni­um Fi­nance and

Leas­ing Com­pa­ny and

T&T Unit Trust Cor­po­ra­tion.

It is note­wor­thy that the Cen­tral Bank no­tice did not speak to the is­sue of whether ho­tels and guest hous­es have the au­thor­i­ty to trade in for­eign cur­ren­cy.

But the no­tice did make clear that it is il­le­gal for any per­son or en­ti­ty that has not been au­tho­rised by the Cen­tral Bank to be buy­ing or sell­ing for­eign cur­ren­cy.

Ac­cord­ing to the no­tice: "The Ex­change Con­trol Act Chap. 79:50 (ECA) states:

"Ex­cept with the per­mis­sion of the (Cen­tral) Bank, no per­son (oth­er than an au­tho­rised deal­er) shall in T&T, buy or bor­row any gold or for­eign cur­ren­cy from, or sell or lend any gold or for­eign cur­ren­cy to, any per­son oth­er than an au­tho­rised deal­er" (Sec­tion 6(1)).

"Any per­son...who con­tra­venes any re­stric­tion or re­quire­ment (of the ECA)...and any...per­son who con­spires or at­tempts, or aids, abets, coun­sels or pro­cures any oth­er per­son, to con­tra­vene any such re­stric­tion or re­quire­ment...is guilty of an of­fence...(and) is li­able:

(a) on sum­ma­ry con­vic­tion to a fine and to im­pris­on­ment for two years (or)

(b) on con­vic­tion on in­dict­ment to a fine and to im­pris­on­ment for five years, and where the of­fence is con­cerned with any cur­ren­cy, any se­cu­ri­ty, any gold, any goods or any oth­er prop­er­ty, the Court may if it thinks fit, or­der the cur­ren­cy, se­cu­ri­ty, gold, goods or prop­er­ty to be for­feit­ed.' (Fourth Sched­ule)."

So it is clear that, as far as the Cen­tral Bank is con­cerned, the hun­dreds of re­tail stores that are buy­ing and sell­ing US cur­ren­cy on a dai­ly ba­sis are en­gag­ing in an ac­tiv­i­ty that is a con­tra­ven­tion of the Ex­change Con­trol Act and is an il­le­gal prac­tice.

Sev­er­al ques­tions arise as a re­sult of the fact that the buy­ing and sell­ing of US cur­ren­cy–by en­ti­ties that are not au­tho­rised by the Cen­tral Bank–seems to be flour­ish­ing in T&T.

1. If the Cen­tral Bank is aware that there is a flour­ish­ing, il­le­gal trade in US cur­ren­cy in T&T, what has it done to crim­i­nalise this il­le­gal ac­tiv­i­ty, apart from is­su­ing its May 2016 state­ment?

2. Do the law en­force­ment au­thor­i­ties have any ev­i­dence that casi­nos op­er­at­ing in T&T–which have spread like a wild­fire on a scorch­ing, dry-sea­son af­ter­noon–are en­gag­ing in the il­le­gal buy­ing and sell­ing of US cur­ren­cy?

3. Do the law en­force­ment au­thor­i­ties have any ev­i­dence, ac­tion­able or oth­er­wise, that some of the US cur­ren­cy that is be­ing bought and sold in this flour­ish­ing black mar­ket rep­re­sents the pro­ceeds of crim­i­nal ac­tiv­i­ties?

In oth­er words, are crim­i­nals us­ing the black mar­ket in US cur­ren­cy to laun­der the pro­ceeds of their crimes?

4. Do the law en­force­ment au­thor­i­ties have any ev­i­dence that, hav­ing laun­dered their US cur­ren­cy in the lo­cal for­eign ex­change black mar­ket, crim­i­nals are us­ing the in­flat­ed TT dol­lar pro­ceeds to pur­chase prop­er­ties through­out the length and breadth of Trinidad AND To­ba­go?

5. Can it there­fore be ar­gued that by ig­nor­ing this il­le­gal trade in US cur­ren­cy that the Cen­tral Bank and the law en­force­ment au­thor­i­ties are con­don­ing the breach of the Ex­change Con­trol Act, which is con­tribut­ing to mon­ey laun­der­ing, il­le­gal prof­i­teer­ing and in­flat­ing the price of re­al es­tate in T&T?

6. If the Cen­tral Bank and the law en­force­ment au­thor­i­ties are con­don­ing a prac­tice that con­tributes to mon­ey laun­der­ing and il­le­gal prof­i­teer­ing, how are they go­ing to con­vince the Caribbean Fi­nan­cial Ac­tion Task Force–whose ad­dress is 21st floor Nicholas Tow­er on In­de­pen­dence Square–that T&T is do­ing all it can to ad­dress the prob­lem of mon­ey laun­der­ing in this coun­try?

What can the au­thor­i­ties do?

a. The Cen­tral Bank, along with the law en­force­ment au­thor­i­ties, can crim­i­nalise the il­le­gal trade in US cur­ren­cy by no­ti­fy­ing re­tail­ers that they are com­mit­ing an of­fence by trad­ing in US cur­ren­cy and re­quest­ing that they cease and de­sist?

b. The Ex­change Con­trol Act should be clar­i­fied to de­ter­mine if the sell­er or buy­er of US cur­ren­cy is guilty of a crime or both;

c. The law en­force­ment au­thor­i­ties can raid some of the re­tail en­ter­pris­es that are trad­ing in US cur­ren­cy and ini­ti­ate pros­e­cu­tion against them. This would at least in­di­cate that the au­thor­i­ties be­lieve the il­le­gal trade in US cur­ren­cy is a prob­lem that must be ad­dressed;

d. One fair­ly ob­vi­ous so­lu­tion would be for the Cen­tral Bank to in­crease the num­ber of bu­reaux de change in T&T, by li­cens­ing some of the re­tail­ers who are cur­rent­ly trad­ing in US cur­ren­cy il­le­gal­ly. The li­cence would be a source of funds for the Cen­tral Bank and would al­so en­sure that a new and im­por­tant group is sub­ject­ed to an­ti-mon­ey laun­der­ing reg­u­la­tions and re­port­ing re­quire­ments;

e. In a sense, the Cen­tral Bank has ag­gra­vat­ed the black mar­ket in US cur­ren­cy by not pro­vid­ing the au­tho­rised deal­ers with enough for­eign ex­change to sat­is­fy the de­mand of their cus­tomers. The Cen­tral Bank's re­sponse to that state­ment would be that if it were to sat­is­fy all the de­mand, T&T's for­eign re­serves would be de­plet­ed in less than two years.

The Cen­tral Bank is ra­tioning US dol­lars by sell­ing on av­er­age US$150 mil­lion a month, but it is al­so keep­ing a tight rein on the sell­ing price of US dol­lars.

Is part of the dys­func­tion­al­i­ty of the lo­cal for­eign ex­change mar­ket that the Cen­tral Bank wants to con­trol the price of US dol­lars, while al­so con­trol­ling the mar­gin­al sup­ply?

Dis­clo­sure: The au­thor may have pur­chased US dol­lars on the il­le­gal black mar­ket BE­FORE May 2016