So we will just attempt to make it through it and I will try to monitor it. All eyes are on Venezuela today, and Venezuela's effect on the Caribbean nations from energy to trade and other things are very concerning, specifically Eastern Caribbean nations. So, I think the question that I have is, all six countries of the Organization of Eastern Caribbean States are members of the Bolivarian Alliance called ALBA, which includes efforts to promote regional cooperation and alleviate hardship; so to what extent have ALBA and Petrocaribe increased Venezuela's influence in the Caribbean? I think I can respond to that concern greatly.
Mr. Farnsworth. Mr. Chairman, thank you. And I agree it is the pregnant issue if you will of the area. Venezuela is a country that is in collapse. Economically, some are stating it is no longer a democracy. It is a nation that has serious and lasting internal problems which it is going to take years to get beyond. And so, the relationship that Venezuela has actually established with a variety of nations of the Caribbean in great times has actually become strained, due to the fact that the largesse that Venezuela has actually had the ability to frankly distribute or to offer a concessionary on concessionary terms has actually been much constrained in the present environment.
I guess what I would state remains in the present environment, since of the problems that Venezuela is having and honestly since of the opportunities that we have in the United States through the whole revolution of energy that we have seen in our own nation over the last several years, we have a chance to come into the Caribbean as a partner and state, look, you understand the programs and the activities that you might have been finishing 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 - How to finance building a home.
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 don't understand the response to that. Mr. Farnsworth. Well, I think in the existing environment we require to do some foundation. We require to do some spade work. I suggest, look, Petrocaribe was a really effective program and we understand why. I mean, it was prompt, it provided something that the leaders required when they needed it. It was symbolic. It was extremely, very easy to discuss to people. I suggest, we are getting oil from Venezuela.
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It was on one problem. And I think often, when the United States engages with the nations of the Caribbean, we have a great deal of well suggesting programs and fantastic ideas, but they are diluted, right? Not misguided, however watered down in terms of the effort and the focus. Under Petrocaribe, it was one item easily explained, highly symbolic, and individuals stated Venezuela's our pal - What does ear stand for in finance. And I think what we require to do better from the United States' viewpoint is to build that level of trust through an ongoing sustained engagement with the area so that people can say, look, we do trust you. How old of an rv can you finance.
Mr. Duncan. I personally believe energy is an excellent opportunity for us, no doubt about that. Let me delve into money 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 decrease cash laundering and chances for terrorist organizations to access the financial system? And that is most likely to Sally. Ms. Yearwood. In a great deal of ways it does the opposite, since when U.S. banks vacate the region what you have produced in reality is a space and that ends up being filled by other institutions.
So, what is being developed is a scenario where there is more chance for terrorist financing or something to fail and somebody to make use of that void. So I would state that the U.S. banks definitely need to be an essential and essential player in the local money system. Mr. Duncan. I am most likely less worried, and possibly I shouldn't be, however less worried about terrorism funding through the Caribbean banks as I have to do Have a peek here with cash laundering. What are the two ways government can finance a budget Click here for more info deficit?. We simply saw in Panama, a big $800 million cash laundering plan, realty involvement, big number of workers involved in a genuine service-- still a cash laundering scheme.
Ms. Yearwood. Part of the issue is the perception of danger versus the reality of the danger. Banks are not leaving the Caribbean due to the fact that there is cash 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 every single account that you are dealing with you have to put a huge quantity of cash into making sure that the cost of-- that the businesses is clean. However what we have to carry out in impact is produce a system where the regulators, the banks, everyone is interacting, details is being shared, and when information is passed between the regulators and the Treasury or the regulators and the banks, individuals understand where the voids are.
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And the problem in the Caribbean is that the economies are little, putting these systems in place costs a lot, but all the Caribbean will tell you that they satisfy the compliance regulations. And so there is a disconnect between what is really taking place and what individuals are stating is happening. I believe among the common complaints is the breakdown between what is what happens if you stop paying timeshare going on in offshore monetary services and what is going on in banking. And the Panama Documents were very mostly connected to the offshore monetary services market versus the correspondent banking and de-risking issue that is currently being dealt with.
Mr. Duncan. I am presuming that the Federal Federal government is monitoring-- in Panama Papers an individual is never implicated because and begin shifting monetary resources around, in potentially, the Caribbean nation. I am assuming our Treasury and FBI are keeping track of that, I would presume. So I am going to go ahead and accept the ranking member. Mr. Sires. One of the factors that I supported, or I still support the export of energy from this nation is to offset the impact 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 remains in problem. I think their production is something like 40, 50 percent less, and there is a void there that we can help fill and, you understand, we can truly help in regards to simply having a little bit more influence on individuals. The other thing that frets me is that on the eastern part of the Caribbean. Generally, 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 disadvantage this puts us when we don't have, really, an existence in the Eastern Caribbean.