The dilemma of Alliance Financial Services Limited
In a press release from the Bank of Jamaica (BOJ), it was announced that the Alliance Financial Services Limited (AFSL) was suspended by the BOJ on 3 December 2021, after being involved in financial crimes.
These financial crimes included breaches in the Banking Services Act, the Bank of Jamaica Act, and the Proceeds of Crime Act which resulted in the suspension of their remittance services, MoneyGram. A search warrant was issued upon AFSL by the Financial Investigations Division (FID) in 2018 when it was discovered that cash transactions exceeding USD15,000 were not filed to the Chief Technical Director at FID. This charge is known as ‘Failure to file Threshold Transaction Reports’.
According to Section 22A of the Bank of Jamaica Act, no person should buy, sell, borrow or lend foreign currency or currency instruments without being an authorized dealer. The AFSL were not authorized dealers, yet they deposited more than 20 foreign currency loans which were worth up to US$8 million to different entities in 2014-2017. This led to Robert Chin, Vice President of Alliance Financial Limited (AFL), and Peter Chin, President of AFSL being charged with ‘Carrying on Business of Lending Foreign Currency without being an Authorised Dealer’. However, the Office of the Director and Public Prosecutions revealed on 13 January 2022 that it is the Crown’s intention to drop the charges from the Chin brothers come 3 March 2022.
Additionally, BOJ’s Fintech Regulatory Sandbox was also withdrawn. The Sandbox can enable any financial institution to innovate, enhance their digital financial services, be competitive and protect their consumers. It allowed for ASFL to become a Payment Service Provider where consumers can make payments to any entity. BOJ took back the Sandbox from AFSL after AFSL was charged with financial crimes.
Alliance Financial Services Limited has been in court since December 2021 in an attempt to lift the suspension of their Cambio and remittance services, this proved futile. The ASFL had licenses for five Cambios in Jamaica, two Cambios in Kingston and St. Andrew, and one in Manchester, Clarendon, and St. Catherine and now operations are suspended. Their services were suspended during the time when more remittances were coming into the country.
