Despite the efforts of the Financial Intelligence Unit (FIU) and passage of laws aimed at stemming money laundering, the illegal trade continues to thrive in T&T, says Agriculture Minister Clarence Rambharat.
Speaking on the subject, Hard Economic Realities Facing T&T, at the Employers' Consultative Association's Leadership Conference at its Training Room in Aranguez, the minister said no matter how well capitalised an organisation was and its wealth of talent, it could not get away from the issues of disruption and distortions caused by money laundering.
Rambharat said other illicit practices affecting the economic health of T&T included illegal quarrying, the illegal diesel trade and gambling, each of which generated $5 billion annually and cost the Treasury $15 billion in revenue for the same period.
Money laundering, he said, is not designed to turn a profit and serves as nothing more than an impediment to the legal transactions of bonafide entrepreneurs and investors. Businesses formed to wash money through this country's financial system, therefore, are able to provide goods and service way below cost and compete unfairly with bonafide organisations.
Rambharat said the FIU has identified certain types of business that are more susceptible to money laundering. They include real estate, some professional services, businesses related to the trade in jewelry, restaurants and construction companies.
"Any activities where you are able to justify a flow of funds makes the business susceptible to money laundering and if you are a bonafide business enterprise trying to compete in an environment where you face under pricing by people who are not in legitimate business, then it's a challenge to compete and it's a challenge to maintain profitability and sustain your businesses," he said.
The minister added, "The foreign flow of funds into our region and into T&T is very, very disruptive. Look around and see. In Rio Claro, my area, I never expected to see four casinos, where I could visit all four within a five-minute walk. If you look around the country you see in some very rural communities, the proliferation of casinos and then you would see the proliferation of gambling machines.
"In fact, many establishments which were previously rum shops, were air conditioned, the doors tinted and rented out. You push the door and you see a massive roulette machine there and if you stand up outside, you see people showing up as though they were showing up for work. So the flow of foreign funds into and by the way out of this country creates distortions and disruptions."
Rambharat said supermarket traders in rural communities are under siege as a direct result of "businesses" with less than honourable intent.
But it is not just the flow of funds into this country that should be of concern but the flow of funds from these shores, too, he said.
"Funds flow into T&T from one part of the world and are passed through seemingly legitimate businesses in T&T, but the ultimate destination for these funds is North America. That is where the real investment in real estate takes place, but the source of funds has to be identified to meet the strict North American banking requirements.
"The movement of the funds, directly from certain parts of the world into North America are heavily scrutinised, so those funds are passed through countries like T&T, legistimised and sent back out," said Rambharat.
"And, if you have any doubt, go to one of those businesses that allows you to send foreign currency out of the country. Go on a Monday morning. Watch the line-up and watch the type of money in T&T dollars being converted and sent out of the country routinely."