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aggressively. While this might well be an excellent primary way for credit unions to compete effectively with dominant players,83 these efforts have currently not been mobilized entirely.
Exclusivity Agreement In Jamaica, Western Union has an exclusive contract with Grace Kennedy Remittance Services that prohibits Grace Kennedy from engaging in remittance businesses through any other remittance company. Multinational MTOs frequently impose such agreements on local MTOs. However in the case of Grace Kennedy, the exclusivity clause is mutual, and similarly prohibits Western Union from engaging with other local MTOs to offer services. This type of mutual exclusivity clause is extremely rare, and may be unique. Grace Kennedy Remittances is an established Jamaican company of over 80 years old, and is only one subsidiary of 53 other subsidiaries in the GK group. GK was chosen by WU because it was such an established and reputable company. Remittances under their agreement began in 1990. Western Union pays a commission per transaction to Grace Kennedy, and the company has also recently bought a 25 percent share of Grace Kennedy.84 Grace Kennedy has now also opened its first bank, the FirstGlobal Bank. The exclusivity agreement appears to have created oligopolistic conditions for the limited number of international MTOs and has stifled greater competition in the market85. Authors’ fieldwork in Jamaica also suggests that it has helped discourage more international MTOs from entering the Jamaican remittance market landscape.
Legal and Regulatory Framework Applicable to Remittance Companies and Agents in Jamaica Remittance companies in Jamaica are regulated under the Bank of Jamaica Act, are highly supervised, and are also subject to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures. Such supervision may be advisable given that remittance companies in Jamaica have traditionally operated in an environment characterized by relatively high crime rates. Given the reported involvement of elements in the Jamaican diaspora in criminal activities in Canada and the relatively high incidences of crime in Jamaica, RSPs operating in the Canada-Jamaica corridor potentially face a high risk of money laundering. On the other hand, there has been no evidence of terrorist financing threat to Jamaica.
Money Laundering and Terrorist Financing Risk Posed to RSPs The major types of crime generating proceeds are drug and arms trafficking.86 Jamaica is a drug trafficking route both to North America and to Europe (especially the UK).
83. 84. 85. 86.
Ibid. Interviews with executives from Grace Kennedy Remittances, Kingston, Jamaica. Based upon authors’ research and fieldwork. Mutual Evaluation Report of Jamaica, CFATF, October 2005.