Part 1 of 2
By Jim Bleyer
Besides its quiet charm, the verdant Caribbean isle of Nevis is best known for being the birthplace of Alexander Hamilton and a haven for tax cheats and money launderers.
David Straz, Tampa’s billionaire mayoral hopeful, is intentionally or not, boosting Nevis’ reputation as a safe harbor for international criminals.
Banking laws are lax and St. Kitts-Nevis, along with several other small island developing states have not become parties to the United Nations Convention Against Corruption (UNCAC). Even oligarch-drenched Russia is a signatory.
For those nations reluctant to join the compact, secrecy overrides any consideration to rooting out corruption. Nevis banks and the country itself proudly advertise that fact.
The Federation of St Kitts-Nevis is one of the countries blacklisted by the Organization for Economic Cooperation and Development for being uncooperative in the fight against tax evasion and money laundering.
Against this unscrupulus backdrop, Straz served for several years as director of the Bank of Nevis Ltd., an offshore depository with its share of scandal and corruption. Straz retired from the bank’s board in 2013 but his financial interest still persists.
In its April, 2017 prospectus, the Bank of Nevis noted the David A. Straz Jr. Foundation was its second largest shareholder owning 12.60 percent of the stock.
In 2014, a tax evader from Wyoming was found to owe the US government more than $3 million because he secreted funds in the Bank of Nevis.
Kevin Huggins, president of the Bank of Nevis, was suspended for alleged extortion earlier this year.
The U. S. State Department in March of this year labeled Nevis and St. Kitts as a “jurisdiction of concern,” noting that financial institutions there tend to overlook money laundering by narcotics traffickers.
In the post-9/11 world, banks also can be helpful in identifying or tracking the flow of funds needed for substantial terrorist activities.
“The ambiguous regulatory framework regarding customer due diligence makes Nevis a desirable location for criminals to conceal proceeds,” said the Department of State. “St. Kitts and Nevis did not report passage of new enforcement legislation or prosecutions in 2016, and there have been no money laundering prosecutions or convictions since 2013,” the critical report went on.
UNCAC is a multilateral treaty negotiated by member states of the United Nations and promoted by the UN Office on Drugs and Crime (UNODC). It is one of several legally binding international anti-corruption agreements.
Specific acts that signatories must criminalize include active bribery of a national, international or foreign public officials; passive bribery of a national public official; embezzlement of public funds; obstruction of justice, and the concealment, conversion or transfer of criminal proceeds (money laundering). The Bank of Nevis hasn’t pledged to combat those types of criminal activity despite reams of loopholes.
Parties are encouraged, but not required, to criminalize passive bribery of foreign and international public officials, trading in influence, abuse of function, illicit enrichment, private sector bribery and embezzlement, and the concealment of illicit assets.
A particularly contentious issue for St. Kitts-Nevis and the few other countries that refuse to sign the anti-corruption document is that UNCAC requires simplification of evidentiary rules by ensuring that obstacles arising from the application of bank secrecy laws can be eliminated.