~ Wants ‘leniency’ from CBCS ~
PHILIPSBURG–Cash-strapped Postal Services St. Maarten (PSS) finds itself in a bind as it wants to regain its licence to operate the profitable MoneyGram services in St. Maarten, which it lost in 2018 after it requested a temporary suspension of services due to safety concerns.
Continuing with MoneyGram can help PSS climb out of its current financial hole (see related article). However, to get back its licence, PSS must first meet a new set of costly requirements instituted by the Central Bank of Curaçao and St. Maarten (CBCS) just one month after PSS lost its licence. PSS is now hoping that government can intervene and request CBCS to be “lenient” by allowing PSS to restore services and granting it time to meet the necessary requirements.
PSS informed CBCS in February 2018 that it would be suspending its services after local law enforcement and the United Postal Union (UPU) advised PSS management to suspend offering MoneyGram services due to safety reasons stemming from the small location that PSS occupied after Hurricanes Irma and Maria in 2017. PSS’ main building had been destroyed by Irma and the postal service then moved its operations across the street to a much smaller location. PSS now operates from the more spacious former Census Office on Pond Island.
“PSS management at the time sent in a suspension request to the Central Bank basically stating the security issues and until a more feasible location is found. When Hurricane Irma hit and PSS’ building got damaged, we had to go into a smaller location, [which – Ed.] … the UPU and law enforcement felt was not a good idea to continue with MoneyGram,” PSS Supervisory Board representative Marinka Gumbs told Members of Parliament (MPs) during a public plenary session of Parliament on Monday.
“The Central Bank said if we suspend our services, we will lose our licence to continue these activities. This was in February 2018 and in March 2018, the Central Bank changed the rules for requesting a new licence [to operate a foreign exchange service]. … We understand that these are the rules for a new entity, but at the same time, it was just February that we asked for a suspension.
“We are hoping to receive some leniency from government, some leniency with regard to the new measures that the Central Bank put in place. We are not saying that the rules should not be followed, just give us some time to get our act together to follow the rules and guidelines.”
Gumbs said the PSS board had stressed to government the dire need for it to get its licence back, as MoneyGram is “a money-making” service.
“We sent a letter to government requesting their intervention in this Central Bank [matter]. … MoneyGram did not suspend us, although the licence to carry out the service was suspended by the Central Bank. MoneyGram still has us as an agent and they are very willing to continue with the Post Office to carry out this service. We were just in talks with the MoneyGram representative in Miami and he is asking us, ‘When are you ready? Because we are ready to continue service with you.’
“This is very important for the longevity of PSS as well. We don’t want to continue to knock on government’s doors,” Gumbs said, adding that PSS wants to be financially stable and to stand on its own feet. “But we need government to intervene and ask the Central Bank to give us some leniency for us to restore and continue these services.”
The new regulations to obtain a licence to operate a money transfer service include an application fee of NAf. 10,000; providing a guarantee from a local bank to the tune of NAf. 50,000; producing a signed statement from a certified public accountant to certify that the applicant has equity capital of at least NAf. 100,000; identifying two managing directors (PSS currently only has one); and producing the two most recent audited financial statements, amongst other requirements.
Gumbs said PSS is already in dire straits and would need time to gather the NAf. 10,000 application fee.
As it relates to the guarantee from a local bank, PSS had approached a local bank to obtain this guarantee. However, because of the Financial Action Task Force (FATF) regulations, the bank is not willing to provide the guarantee and if PSS is eventually successful in getting its licence back, the bank indicated that the postal service would have to close its accounts at that institution, as it is not willing to risk breaching FATF regulations.
Gumbs said that because Western Union, another money transfer service, is operating a service in Cole Bay, there must be a way for MoneyGram to also operate its service.
“We are just asking for some time to get these documents in place and we hope that government can grant our wishes with the Central Bank so that we can contact our [MoneyGram] agent in Miami to let them know that we are ready to start resuming these activities,” Gumbs stressed.
Source: The Daily Herald https://www.thedailyherald.sx/islands/85331-pss-wants-govt-to-help-it-regain-licence-to-operate-moneygram
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