BANK EXPLAINS CUBAN ACCOUNTS DECISION

UNCLAS KINGSTON 000644

SIPDIS

SIPDIS

STATE FOR WHA/CAR (WBENT),WHA/CCA, EB/ESC/TFS (NOBLE)

E.O. 12958: N/A
TAGS: ECON EFIN EINV JM
SUBJECT: BANK EXPLAINS CUBAN ACCOUNTS DECISION

REF: 03/30 MORGAN/BENT E-MAIL

THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE
ACCORDINGLY.


1. (SBU) The Cuban Ambassador to Jamaica, Gisela Garcia
Rivera, responded with outrage to recent media reports that
the Bank of Nova Scotia Jamaica Limited (BNS) would cease
holding U.S.-dollar-denominated accounts maintained in
Jamaica for the Cuban Embassy. Garcia announced that the
Cuban Embassy would close all accounts held with BNS, saying:
"We consider this an outrageous extraterritorial application
of United States laws in the territory of an independent
country and it is therefore a serious violation of
international law." On March 29, Econoff followed up with
David Noel (protect),Senior Vice President and Senior Legal
Counsel for BNS. Econoff asked for clarification regarding
those media reports, according to which BNS had sent a letter
that cited provisions of the USA PATRIOT Act as justification
for their actions.


2. (SBU) In fact, Noel explained, it was not only the PATRIOT
Act which had led to his decision, as the compliance officer
for BNS, to inform Ambassador Garcia that the bank would no
longer be able to hold U.S.-dollar-denominated accounts. The
branch manager who wrote the actual letter to the Cuban
Ambassador, he explained, was not fully aware of the laws in
question, which led to a misplaced emphasis on the PATRIOT
Act. He stated that guidance from the sector,s regulator )
the Bank of Jamaica (BOJ) ) that was issued in September
2005 had led him to examine BNS procedures, and that in the
course of this review he had concluded that the bank "was
exposing itself to risk" by holding such accounts.


3. (SBU) Noel opined that the media were not interested in
hearing his side of the story, as it is less compelling than
hints that the BNS is beholden to United States law. "The
fact of the matter is that this is business," he continued.
"It is nave to think that you can ignore the domestic
legislation of any country in this industry." He further
noted that, from a political perspective, he was not
expecting any Jamaican public figures to come out in support
of BNS actions. "It is far easier to support poor little
Cuba," he said.


4. (SBU) His cynicism notwithstanding, Noel said that he was
pleased with the backing that he had received from BNS senior
management. He believed that there was "no chance" that the
bank would bow to media or political pressure to reverse the
decision. Post will continue to monitor press coverage and
the bank,s public response, and will report as appropriate.
TIGHE