Transparency of the Regulatory System
The government publishes a Gazette that includes proposed as well as enacted laws. Government Ministries also make available policies, laws and regulations pertinent to their portfolio available on their respective Ministry websites. Despite these measures, some investors complain that the incentive regime for incentives is not transparent, land title is not always reliable and secure, and that bureaucratic delays or corruption can be hindrances to doing business in Belize.
There are quasi-governmental organizations mandated by law to manage specified regulatory processes on behalf of the GoB, e.g. the Belize Tourism Board, BELTRAIDE, and the Belize Agricultural Health Authority. There are no reports that these processes significantly distort or discriminate against foreign investors.
The cabinet dictates government policies that are enacted by the legislature and implemented by the various Ministries of Government. Regulations exist at the local level, primarily relating to property taxes and registering for trade licenses to operate businesses in the municipality.
Accounting, legal and regulatory systems are consistent with international norms. Publicly owned companies are generally audited annually and the reports are prepared in accordance with International Financial Reporting Standards and International Standards on Auditing.
Draft bills are published in the gazette by the Government of Belize Printers and publicly available for a minimal fee. Draft bills are generally open to public comment. Once introduced in the House of Representatives, they are passed to Standing Committees of the House of Representatives which then meet and invite the public and interested persons to review, recommend changes, or object to draft laws prior to further debate. However, laws are sometimes passed quickly without meaningful publication or public review, as was the case with the Central Bank of Belize (International Immunities Act) 2017 and the Crown Proceedings (Amendment Act), 2017.
Reliable data is scarce in Belize, so regulation—when it is updated—tends to happen on the basis of anecdotal evidence or political whims.
International Regulatory Considerations
As a full member of the Caribbean Community (CARICOM), Belize’s foreign, economic and trade policies vis-a-vis non-members are coordinated regionally. The country’s import tariffs are largely defined by CARICOM’s Common External Tariffs.
Belize is also a member of several other treaties as a result of its membership within CARICOM. A primary example is the Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU).
Outside of CARICOM, Belize is also a member of the Central American Integration System (SICA) at a political level, but is not a part of the Secretariat of Central American Economic Integration (SIECA) which supports economic integration of Central America.
Belize is a member of the WTO and CARICOM and adheres to the norms established by these organizations.
The Belize Bureau of Standards (BBS) is the national standards body responsible for preparing, promoting and implementing standards for goods, services and processes. The BBS operates in in accordance with the WTO Agreement on Technical Barrier to Trade and the CARICOM Regional Organization for Standards and Quality
Legal System and Judicial Independence
As a former British colony, Belize follows the English Common Law legal system which is based on established case law. Contracts are legally enforced through the courts. In 2010, Belize's adopted the Caribbean Court of Justice (CCJ) as its final appellate court on civil and criminal matters. This replaced the Judicial Committee of the Privy Council of the United Kingdom.
General information relating to Belize judicial and legal system, including links to Belize's Constitution, Laws and judicial decisions are available at the Judiciary of Belize website www.belizejudiciary.org. The information available on the Judiciary of Belize website is by no means exhaustive but merely for reference.
Belize has a written Contract Act which is supported by precedents from the national courts as well as from the wider English speaking and Commonwealth case law. There are no specialized courts to deal with commercial disputes or cases. The Supreme Court introduced court – connected mediation as an alternative to litigation.
The Belize Constitution is founded on the principle of separation of powers, which requires that the judiciary be independent from the executive branch of government. However, the Bar Association of Belize sued the GoB over its 2008 sixth amendment to the Belize constitution, which gave the government direct control over the length of time judges at the magistrate level would be appointed. In February 2017, the CCJ dismissed the appeal by the Bar Association. While the Court found that the Government’s Constitutional Amendment was not unconstitutional, it made strong recommendations to revise the manner in which Justices of the Appellate Courts are appointed and their tenure is determined to ensure stronger judicial independence and impartiality.
The current judicial process faces systematic challenges that relate both to civil and criminal cases, including frequent adjournments, delays, and a backlog of cases. Even though much remains to be done to improve overall effectiveness of the judicial process, several measures are being implemented to improve the country’s judiciary. The training of mediators and the introduction of court – connected mediation support alternative methods to dispute settlement. This effort along with better case management procedures is expected to decrease the courts case load, time delays and cost particularly for smaller claim civil cases.
Regulations and enforcement actions are appealable. Judgments by the Belize Supreme Court and the Court of Appeal are available at http://www.belizejudiciary.org. Judgments by the Caribbean Court of Justice, Belize’s highest appellate court are available at http://www.caribbeancourtofjustice.org. The Government of Belize is also being challenged in four cases that are before the U.S. courts.
Laws and Regulations on Foreign Direct Investment
In December 2016, Belize acceded to the United Nations Convention Against Corruption (UNCAC) amid public pressure and demonstrations from the teachers unions. Please see the section on corruption for more information.
BELTRAIDE is the Government’s investment and export promotion agency. The laws, rules, procedures and report requirements related to investors differ depending on the nature of the investment. Nonetheless, BELTRAIDE provides advisory services and other related information for foreign investors relating to procedures for doing business in Belize and incentives available to qualifying investors. Further information is available at the BELTRAIDE website: http://www.belizeinvest.org.bz/
Competition and Anti-Trust Laws
Belize does not have any particular laws governing competition, but there are attempts to limit outside competition in certain industries (such as food and agriculture) by levying high import duties.
In 2015, a local Belizean importer imported rice into Belize from Guyana in direct competition with local rice producers. The shipment was denied by the agricultural health authorities, initially because they alleged that the safety/ sanitary requirements could not be verified. The Supreme Court later ruled in favor of the government authorities and decided that the importer violated local laws in failing to obtain the required permit prior to importation.
Expropriation and Compensation
There have been several cases in which the government, under its right of eminent domain, appropriated land that was private property, including land belonging to foreign investors.
There were no new expropriation cases in the current year. However, there are allegations that several previous expropriations were done for personal or political gain. Belizean law requires that the government assess and compensate according to fair market value. These types of expropriation cases can take many years to settle and there are numerous cases where there was no compensation or compensation is still pending.
The process to land title is flawed and, though the government recognizes this and is working with the World Bank to improve its land title system, there are cases of private as well as government manipulation of land title involving foreigners and Belizeans.
Since 2008, the Government of Belize engaged in the nationalization of the major telecommunications (BTL) and electricity companies (BEL), which, when combined with legislation on arbitration, resulted in a decrease in the flow of foreign direct investment.
While the government resolved its dispute with the BEL in 2015, it still has not resolved the dispute with the previous owners of the BTL. Since it first nationalized BTL in 2009, the government has been in multiple court cases directly and indirectly related to the company. Judgments were issued by the CCJ, the London Court of Arbitration, the Permanent Court of Arbitration in The Hague and the U.S. district and circuit courts. In late 2015, GoB agreed to a compensation package in line with a judgment issued by the Permanent Court of Arbitration.
Since July 2015, the U.S. courts upheld four arbitration judgments against the government including one related to the BTL nationalization. Even if U.S. courts ultimately uphold the arbitration judgments, enforcement action would need to proceed through Belizean courts and would likely be appealed up to the Caribbean Court of Justice.
In the cases of expropriations, the claimants claimed that the Government failed to adhere to agreements entered into by a previous administration.
ICSID Convention and New York Convention
The Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) was extended to Belize by an act of the United Kingdom when Belize was a colony. After independence, Belize did not ratify the Convention. Nevertheless, Part IV of Belize’s Arbitration Act (Chapter 125) of the Laws of Belize specifically addresses the New York convention and empowers domestic courts to enforce awards under the Convention. A 2013, judgment of the Caribbean Court of Justice restored Part IV of the Arbitration Act for the enforcement of arbitral awards.
Belize signed on to but not yet ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID convention). For more information visit http://sice.oas.org/dispute/comarb/icsid/w_conv1.asp
Investor-State Dispute Settlement
Please see Section 3a above- Bilateral Investment Agreements and Taxation Agreements.
Belize is also a member of the Caribbean Community (CARICOM) Single Market and Economy as well as a party to a regional Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU). Both these regional arrangements make provisions for the settlement of investor – state disputes.
Since Belize is not a party to any BIT or FTA with the United States, investment disputes involving U.S. persons are taken either before the courts or before international arbitration panels.
Local courts would recognize and enforce foreign arbitral awards against the government but these would likely be adjudicated to the Caribbean Court of Justice (CCJ), Belize’s highest appellate court.
International Commercial Arbitration and Foreign Courts
Belize’s Arbitration Act allows the Supreme Court of Belize to support and supervise dispute settlement between private parties by arbitration. In 2013, the Supreme Court introduced the process of court connected mediation as an alternative method to dispute settlement between private parties and as a means of reducing costs and duration of litigation.
There are numerous instances of cases involving State Owned Enterprises (SOEs) which went before domestic courts with ruling both in favor and against the SOE. These would likely be adjudicated to the Caribbean Court of Justice.
Chapter 244 of the Laws of Belize (Bankruptcy Act) provides and allows for bankruptcy filings (http://www.belizelaw.org). The Act provides for the establishment of receivership, trustees, adjudication and seizures of the property of the bankrupt. The court may order the arrest of the debtor and seizure of assets and documents in the probable event the debtor will flee or avoid payment to creditors. The Act also provides for imprisonment on conviction of certain specified offenses. The Director of Public Prosecutions may also institute prosecution proceedings for offenses emanating or related to the bankruptcy proceedings.