Guyanese and other Caribbean nationals residing in the United States who send remittances to relatives and friends back to their home countries are beginning to experience some level of anxiety as there are concerns that they could soon be charged a fee to do so once the relevant Bill becomes law.
It could be recalled that one of President Donald Trump’s most controversial campaign promises was to build a wall along the US’ southern border, which he claimed would be paid for by the Government of Mexico, to deter illegal immigration. The Government of Mexico has resisted calls for that country’s tax payers to fund the wall. The Trump Administration seems serious about moving ahead with building the wall; but not with US taxpayers’ dollars.
US Congressman Mike Rogers, of Alabama’s 3rd Congressional District is proposing that an amendment be made to the US Electronic Fund Transfer Act to impose a two per cent fee charged on individuals sending money to recipients in 42 countries in Latin America and the Caribbean, including Guyana. The bill, which is titled Border Wall Funding Act of 2017 (HR 1813), has already been introduced in the US House of Representatives.
The bill lists a penalty of not more than US$500,000 or twice the value of the funds involved in the remittance transfer — whichever is greater — or imprisonment for not more than 20 years, or both; for people found guilty of evading the transaction fee.
Since February, similar legislation has been introduced to the US House of Representatives under the Border Wall Funding Act of 2017. The most recent such bill was introduced by Senator Ted Cruz of Texas to allow the use of assets seized from Mexican drug lords, like Joaquin “El Chapo” Guzman. However, many experts are questioning the rationale behind the move. According to Alicia Nicholls; an international trade and development consultant, the proposed fee on remittance outflows makes no sense and therefore could not be justified. For example, while the intention is to target illegal immigrants who send money back to their families; US citizens and Greencard holders also remit money to their relatives and friends abroad and they will also be made to pay the fees.
Additionally, according to Nicholls, the list of ‘foreign countries’ excludes some of the largest sources of illegal immigrants to the US It is still not clear on what basis the Latin America and Caribbean countries were targeted over the others.
Further, if passed, the bill could destabilise the US’ ‘backyard’ which is contrary to US strategic homeland security interests. Currently, many of the region’s economies are already threatened by de-risking, elevated debt levels and high unemployment; this proposed Bill is another worrying development.
In providing his interpretation of the issue, former Foreign Affairs Minister, Dr Henry Jeffrey was quoted in this newspaper as saying that if successful, the Bill will cause severe problems not only in Guyana, but the wider Caribbean and Latin American region. He estimated that Guyana stands to lose G$25-40 million. That’s quite a lot of money for a small country such as ours.
Regional governments must therefore stand up and speak out before it is too late. Dr Jeffrey made reference to the Caribbean Community (Caricom) Trade and Investment Agreement with the US Through that agreement, the Caribbean has been recognised as small and vulnerable economies, and the need for the Region to be given special treatment is reinforced.
Considering the implications, Nicholls has suggested that Latin American and Caribbean governments, along with their diplomatic representatives and the diaspora, lobby against the passage of this bill by engaging in discussions with Congressional and other officials on the serious economic and social impact any potentially significant decline in remittance inflows could have on remittance-dependent countries in the Region.