So we will just try to get through it and I will attempt to monitor it. All eyes are on Venezuela right now, and Venezuela's effect on the Caribbean countries from energy to trade and other things are extremely worrying, especially Eastern Caribbean nations. So, I guess the concern that I have is, all six nations of the Organization of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, that includes efforts to promote regional cooperation and alleviate hardship; so to what level have ALBA and Petrocaribe increased Venezuela's influence in the Caribbean? I believe I can respond to that question tremendously.
Mr. Farnsworth. Mr. Chairman, thank you. And I concur it is the pregnant concern if you will of the region. Venezuela is a nation that remains in collapse. Financially, some are saying it is no longer a democracy. It is a country that has serious and lasting internal problems which it is going to take years to get beyond. Therefore, the relationship that Venezuela has established with a number of nations of the Caribbean in excellent times has ended up being stretched, since the largesse that Venezuela has had the ability to frankly distribute or to provide a concessionary on concessionary terms has been much constrained in the current environment.
I guess what I would say remains in the present environment, because of the troubles that Venezuela is having and frankly because of the opportunities that we have in the chuck mcdowell reviews United States through the whole transformation of energy that we have seen in our own country over the last numerous years, we have a chance to come into the Caribbean as a partner and say, look, you know the programs and the activities that you might have been doing with Venezuela are no longer appropriate and we can supply the same things that you require without the political or without the ideological overhang that you may have had previously - What do you need to finance a car.
Duncan. Let me ask you something about that. Exists enough trust of the United States for us to step into that space with those nations? I do not understand the response to that. Mr. Farnsworth. Well, I believe in the existing environment we need to do some groundwork. We require to do some spade work. I mean, look, Petrocaribe was an extremely successful program and we comprehend why. I imply, it was timely, it provided something that the leaders needed when they needed it. It was symbolic. It was very, very simple to discuss to individuals. I suggest, we are getting oil from Venezuela.
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It was on one issue. And I think sometimes, when the United States engages with the nations of the Caribbean, we have a lot of well indicating programs and fantastic concepts, but they are watered down, right? Not deluded, however diluted in terms of the effort and the focus. Under Petrocaribe, it was one item easily explained, highly symbolic, and people said Venezuela's our buddy - The trend in campaign finance law over time has been toward which the following?. And I believe what we require to do better from the United States' point of view is to build that level of trust through an ongoing continual engagement with the region so that people can say, look, we do trust you. What happened to household finance corporation.
Mr. Duncan. I personally believe energy is a terrific chance for us, no doubt about that. Let me explore cash laundering and terrorism financing a little bit. There is a huge push by the U.S. to have U.S. banks sever relationship with Caribbean-based banking institutions. Does that policy work to minimize money laundering and chances for terrorist companies to access the monetary system? Which is probably to Sally. Ms. Yearwood. In a great deal of ways it does the opposite, due to the fact that as soon as U.S. banks move out of the area what you have created in reality is a void and that ends up being filled by other institutions.
So, what is being developed is a situation where there is more chance for terrorist funding or something to go wrong and someone to make use of that void. So I would state that the U.S. banks definitely require to be an essential and crucial player in the regional cash system. Mr. Duncan. I am most likely less worried, and maybe I should not be, but less concerned about terrorism financing through the Caribbean banks as I am about money laundering. What is a future in finance. We just saw in Panama, a huge $800 million money laundering scheme, realty participation, substantial number of employees associated with a legitimate service-- still a cash laundering plan.
Ms. Yearwood. Part of the concern is the perception of threat versus the reality of the threat. Banks are not leaving the Caribbean due to the fact that there is money laundering. Banks are leaving the Caribbean due to the fact that the costs of compliance are overwhelmingly stacked versus the banking system. You have small jurisdictions and for each account that you are handling you have to put a big amount of cash click here into making sure that the expense of-- that the services is tidy. However what we have to do in impact is produce a system where the regulators, the banks, everybody is working together, info is being shared, and when info is passed in between the regulators and the Treasury or the regulators and the banks, individuals understand where the spaces are.
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And the issue in the Caribbean is that the economies are little, putting these systems in place costs a lot, but all the Caribbean will inform you that they fulfill the compliance guidelines. And so there is a disconnect in between what is actually happening and what individuals are stating is happening. I think among the typical grievances is the breakdown in between what is going on in offshore financial services and what is going on in banking. And the Panama Documents were really largely connected to the offshore financial services industry versus the reporter banking and de-risking problem that is presently being dealt with.
Mr. Duncan. I am presuming that the Federal Government is keeping an eye on-- in Panama Papers an individual is never ever linked in that and start shifting monetary resources around, in possibly, the Caribbean country. I am assuming our Treasury and FBI are keeping track of that, I would assume. So I am going to proceed and yield to the ranking member. Mr. Sires. Among the reasons that I supported, or I still support the export of energy from this nation is to balance out the impact of Venezuela since basically they were using it for political purpose. You know, if you take a look at the votes they took at the U.N.
So now Venezuela is in trouble. I think their production is something like 40, 50 percent less, and there is a void there that we can help fill and, you know, we can actually assist in terms of just having a little bit more influence on individuals. The other thing that stresses me is that on the eastern part of the Caribbean. Essentially, we have an Embassy in Barbados and it serves all those islands there. On the other hand, you have Venezuela, Cuba, Brazil, they all have an existence there. So I was just questioning how much of a competitive downside this puts us when we don't have, really, an existence in the Eastern Caribbean.