So we will just attempt to make it through it and I will try to monitor it. All eyes are on Venezuela right now, and Venezuela's impact on the Caribbean nations from energy to trade and other things are very worrying, specifically Eastern Caribbean nations. So, I guess the question that I have is, all six nations of the Organization of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, which includes efforts to promote regional cooperation and ease hardship; so to what level have ALBA and Petrocaribe increased Venezuela's influence in the Caribbean? I think I can answer that question tremendously.
Mr. Farnsworth. Mr. Chairman, thank you. And I concur it is the pregnant issue if you will of the region. Venezuela is a country that is in collapse. Financially, some are saying it is no longer a democracy. It is a nation that has serious and long lasting internal issues which it is going to take years to get beyond. And so, the relationship that Venezuela has actually developed with a variety of countries of the Caribbean in excellent times has actually ended up being strained, since the largesse that Venezuela has had the ability to honestly distribute or to supply a concessionary on concessionary terms has actually been much constrained in the present environment.
I think what I would state remains in the current environment, because of the troubles that Venezuela is having and honestly because of the opportunities that we have in the disadvantages of timeshare United States through the entire transformation of energy that we have seen in our own nation over the last several years, we have an opportunity to come into the Caribbean as a partner and say, look, you understand the programs and the activities that you might have been doing with Venezuela are no longer relevant and we can offer the exact same things that you require without the political or without the ideological overhang that you might have had previously - What is the difference between accounting and finance.
Duncan. Let me ask you something about that. Exists enough trust of the United States for us to step into that void with those nations? I do not understand the response to that. Mr. Farnsworth. Well, I believe in the existing environment we require to do some foundation. We need to do some spade work. I suggest, look, Petrocaribe was an extremely effective program and we understand why. I suggest, it was prompt, it provided something that the leaders needed when they required it. It was symbolic. It was very, very easy to discuss to people. I indicate, we are getting oil from Venezuela.
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It was on one concern. And I think sometimes, when the United States engages with the nations of the Caribbean, we have a lot of well suggesting programs and wonderful concepts, but they are watered down, right? Not deluded, but watered down in regards to the effort and the focus. Under Petrocaribe, it was one item easily discussed, extremely symbolic, and people stated Venezuela's our good friend - What are the two ways government can finance a budget deficit?. And I believe what we need to do much better from the United States' point of view is to build that level of trust through an ongoing continual engagement with the area so that individuals can say, look, we do trust you. What does leverage mean in finance.
Mr. Duncan. I personally think energy is a great chance cancellations com for us, no doubt about that. Let me dig into cash laundering and terrorism funding a bit. There is a big push by the U.S. to have U.S. banks sever relationship with Caribbean-based banking institutions. Does that policy work to reduce money laundering and opportunities for terrorist companies to access the financial system? And that is probably to Sally. Ms. Yearwood. In a lot of methods it does the opposite, because when U.S. banks move out of the area what you have actually developed in reality is a space and that becomes filled by other institutions.
So, what is being created is a situation where there is more opportunity for terrorist financing or something to fail and somebody to exploit that space. So I would say that the U.S. banks definitely require to be a crucial and important gamer in the local money system. Mr. Duncan. I am probably less worried, and perhaps I shouldn't be, however less concerned about terrorism financing through the Caribbean banks as I have to do with cash laundering. What are the two ways government can finance a budget deficit?. We just saw in Panama, a substantial $800 million cash laundering scheme, real estate participation, huge variety of workers involved in a legitimate service-- still a money laundering plan.
Ms. Yearwood. Part of the problem is the perception of threat versus the truth of the danger. Banks are not leaving the Caribbean because there is money laundering. Banks are leaving the Caribbean since the expenses of compliance are overwhelmingly stacked versus the banking system. You have small jurisdictions and for every single account that you are dealing with you have to put a big amount of cash into making certain that timeshare wiki the cost of-- that business is clean. However what we need to perform in impact is create a system where the regulators, the banks, everybody is working together, information is being shared, and when details is passed in between the regulators and the Treasury or the regulators and the banks, individuals know where deep spaces are.
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And the problem in the Caribbean is that the economies are little, putting these systems in location costs a lot, however all the Caribbean will tell you that they satisfy the compliance regulations. And so there is a detach between what is really happening and what individuals are stating is taking place. I believe one of the typical grievances is the breakdown between what is going on in overseas financial services and what is going on in banking. And the Panama Papers were really mainly connected to the offshore financial services market versus the correspondent banking and de-risking problem that is presently being faced.
Mr. Duncan. I am assuming that the Federal Federal government is keeping an eye on-- in Panama Papers a person is never ever linked because and begin shifting financial resources around, in potentially, the Caribbean country. I am assuming our Treasury and FBI are keeping an eye on that, I would presume. So I am going to go ahead and accept the ranking member. Mr. Sires. Among the reasons that I supported, or I still support the export of energy from this country is to balance out the influence of Venezuela because generally they were utilizing it for political purpose. You understand, if you look at the votes they took at the U.N.
So now Venezuela is in difficulty. I believe their production is something like 40, half less, and there is a space there that we can help fill and, you understand, we can really assist in regards to simply having a little bit more influence on people. The other thing that stresses me is that on the eastern part of the Caribbean. Basically, we have an Embassy in Barbados and it serves all those islands there. Meanwhile, you have Venezuela, Cuba, Brazil, they all have a presence there. So I was simply questioning just how much of a competitive disadvantage this puts us when we do not have, really, a presence in the Eastern Caribbean.