Imagine being once the head of Costa Rica’s State bank, the Banco de Costa Rica (BCR) and being turned down as a client by, for being “high risk”, at the Banco Popular y de Desarrollo Comunal (Banco Popular), the “third” of the State banks.
That is the case of Mario Barrenechea Coto, the former general manager of the BCR, who was rejected by the Banco Popular as a client when he wanted to open a savings account to have his pension deposited.
The State bank based its refusal on the fact that Barrenechea, 69, is one of the accused in the well-known “Chinese cement” case. The Public Ministry has charged Barrenechea with embezzlement.
According to the Popular, the fear is that after opening his first account, Barrenechea could acquire other products from the bank for the “money laundering”.
Faced with the rejection Barrenechea filed an appeal with the Constitutional Court (Sala Constitucional). However, on March 22, the Court rejected the appeal and supported the decision of the bank.
Andrés Pérez, the lawyer representing Barrenechea in the criminal process, “It seems to me an error that violates the state of innocence of a person, qualifying it through banking alerts as a risky person. That creates, in my opinion, a problem that is left to the discretion of banking authorities that have no jurisdictional power, to qualify their own clients”.
However, the Banco Popular disagrees with the lawyer’s interpretation and stands firm on its refusal last November 2018, when the Multiplaza Escazu branch refused an account opening for Barrenechea, though the only purpose of the account was to have his Costarricense de Seguro Social (CCSS) retirement pension deposited.
Giovanni Morera Arias, representing the Banco Popular and the branch manager, argued before the Sala: “By examining the resulting risks, it is recognized (…) that the savings account would not only be used to deposit the money from your retirement pension, but also any other money he has (… ) thus Mr. Barrenechea as a client of the institution, could request the opening of any of the other products (accounts) and services that are offered, increasing the possibility of depositing money from a source other than the income from his retirement pension, and thereby increasing the likelihood that Banco Popular, without wishing to do so, will become a participant in a process of legitimizing money, leading to theimmediate closure of its account and the termination of the commercial relationship.”
Mario Barrenechea was arrested on November 3, 2017, suspected of embezzlement in the case of Chinese cement case. He was first held in the Centro de Atención Institucional Adulto Mayor (prison for seniors), in San Rafael de Alajuela, until May 30, 2018, when a judge allowed him to serve his preventive detention (remand) under house arrest and wear an ankle bracelet.
However, on June 21, 2018, the Tribunal Penal de Hacienda (Criminal Court of the Treasury) revoked the measure and had to return to the penal center. Then, in August he was given house arrest again.
Due to a health problem, Barrenechea was hospitalized on February 14 of this year at the San Juan de Dios Hospital and by order of the Tribunal Penal, since February 28, the electronic device was removed.
This week he was discharged from the hospital and is back home.
The main suspect in the Chinese cement case, Juan Carlos Bolaños, is living through a similar process, of obtaining the benefit of house arrest based on a medical condition.
Know Your Customer
Some years back the Superintendencia General de Entidades Financieras (Sugef) – General Superintendent of Financial Institutions – instituted a policy of “Conoce a tu cliente” (know your customer), where private and state banks began a review of their relationship with their clients.
In some cases, accounts were closed when the customer could not satisfy the banking entity of the origin of funds on deposit, or setting limits on amounts with respect to the origin of future deposits and limit the amount of each deposit or wire transfer. This clamping down applied to both new and existing clients.