Transparency of the Regulatory System
St. Vincent and the Grenadines uses transparent policies and effective laws to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. Accounting, legal and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards which stem from the General Accepted Accounting Principles govern the profession in St. Vincent and the Grenadines.
Rulemaking and regulatory authority rests in the unicameral House of Assembly, which has fifteen elected members and six appointed senators who sit for a five-year term. These representatives and senators serve together in a single body. The Public Accounts Committee & Director of Audit ensure the government follows administrative processes.
All regulations relating to foreign investment in the country are governed by the nation’s laws. These laws are developed in the respective ministries and drafted by the Ministry of Legal Affairs. These laws are enforced by the applicable ministry or ministries. The attraction of FDI is governed principally through the laws pertaining to Invest SVG. The laws of St. Vincent and the Grenadines are not available online through any government website.
Most draft bills are published in local newspapers of weekly circulation for public comment. In addition, bills at the consultation stage are circulated in stakeholder meetings. A select committee may also be established to suggest amendments to specified draft bills. In some instances, these mechanisms may also apply to investment laws and regulations. There is no obligation for proposed amendments to be considered prior to implementation.
Regulations are developed nationally and regionally. At the national level, the respective ministries advise the Ministry of Legal Affairs regarding necessary elements and parameters of the proposed legislation. The Ministry of Legal Affairs subsequently drafts the legislation, ensuring compatibility with the nation’s domestic and international legal commitments. Invest SVG has the main responsibility for investment supervision, while the Ministry of Economic Planning, Sustainable Development, Industry, Information and Labor tracks investments to collect information for national statistics and reporting purposes.
The country’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the new Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the Eastern Caribbean Currency Union, although there are some minor differences in implementation from country to country.
An external company must be registered in St. Vincent and the Grenadines if it wishes to operate in-country. The Commercial Registry performs such registrations. Companies using or manufacturing chemicals must first obtain approval of their environmental and health practices from the St. Vincent and the Grenadines National Standards Institution and the Environmental Division of the Ministry of Health.
International Regulatory Considerations
As a member of the OECS and the Eastern Caribbean Economic Union, St. Vincent and the Grenadines subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies, aimed at the progressive harmonization of relevant policies and systems across the region. Thus, the country is obligated to implement regionally developed regulations, such as legislation passed under Organization of Eastern Caribbean States Authority, unless specific concessions are sought.
The country’s Bureau of Standards is a statutory body established under the Standards Act of 1992 to prepare and promulgate standards in relation to goods, services, processes and practices. As a signatory to the WTO’s Agreement on the Technical Barriers to Trade, St. Vincent and the Grenadines is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
St. Vincent and the Grenadines ratified the WTO Trade Facilitation Agreement (TFA) in January 2017 and subsequently notified its Category A measures. Currently, the notifications for Category B and C measures have already been submitted and are being verified. St. Vincent and the Grenadines, with the assistance of the International Trade Centre, is in the process of developing project proposals for each Category C measure. On completion of this exercise, the proposals will be submitted to donor countries and institutions for technical and financial assistance to implement. Upon full implementation of TFA measures, it is estimated that the cost to trade globally will be reduced by an average of 15 percent and boost global trade. These results will be significantly beneficial to all firms that trade globally.
Legal System and Judicial Independence
The country’s legal system is based on the British common law system. The Constitution guarantees the independence of the judiciary. The judicial system consists of lower courts, called Magistrates’ Courts, as well as a Family Court. The Eastern Caribbean Supreme Court (St. Vincent and the Grenadines) Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution. Appeals are made in the first instance to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members. Final appeal is to the Judicial Committee of the Privy Council of the United Kingdom.
The country has a strong judicial system that upholds the sanctity of contracts and prevents unwarranted discrimination towards foreign investors. The government treats foreign investors and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. The police and court systems are efficient and unbiased in commercial matters, and the government operates in a generally transparent manner.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. St. Vincent and the Grenadines is subject to the original jurisdiction of the CCJ.
The United States and St. Vincent and the Grenadines are both parties to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.
Laws and Regulations on Foreign Direct Investment
Invest SVG provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors. Invest SVG has the authority to screen and review FDI projects. The review process is transparent and is contingent on the size of capital investment and the project’s projected economic impact. The investor must complete a series of steps to obtain a business license. These can be viewed at http://www.investsvg.org. Potential investors may review this site for important information prior to doing business in St. Vincent and the Grenadines. All potential investors seeking an incentive package must submit their proposals for review by Invest SVG to ensure the project is consistent with the nation’s laws and interests and would provide economic benefits to the country.
Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.
Competition and Anti-Trust Laws
Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM States. Member States are required to establish and maintain a national competition authority for implementing the rules of competition. CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct. CARICOM competition policy addresses anti-competitive business conduct, such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction or distortion of competition within the Community, and actions by which an enterprise abuses its dominant position within the Community. No legislation is yet in operation to regulate competition in St. Vincent and the Grenadines. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill was submitted to the Ministry of Legal Affairs for review.
Expropriation and Compensation
Under the Land Acquisition Act, the government may, by declaration, initiate the acquisition of land required for a public purpose. A notice of acquisition must be served on the person from whom the land is acquired. All issues relating to payment of compensation can be submitted to a Board of Assessment, whose award must be filed in the High Court. The value of the land is based on the amount for which the land would have been sold on the open market by a willing seller. Under the Alien’s (Land-Holding Regulation) Act, the government can hold properties forfeit without compensation if the terms of the investment are not met. U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in St. Vincent and the Grenadines.
ICSID Convention and New York Convention
St. Vincent and the Grenadines is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of October 14, 1966, and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards; also known as the New York Arbitration Convention.
According to the World Bank’s 2018 Doing Business Report, dispute resolution generally took 595 days, though this may vary. The slow court system and bureaucracy are widely seen as main hindrances to timely resolution to commercial disputes. St. Vincent and the Grenadines is ranked 53rd of 190 countries in enforcing contracts. Through the Arbitration Act (1952), the local courts recognize and enforce foreign arbitral awards issued against the government.
Investor-State Dispute Settlement
Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. St. Vincent and the Grenadines does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States.
The U.S. Embassy Bridgetown is not aware of any current investment disputes in the country.
International Commercial Arbitration and Foreign Courts
The Eastern Caribbean Supreme Court is the domestic arbitration body and the local courts do recognize and enforce foreign arbitral awards. The Trade Disputes (Arbitration and Inquiry) Act provides that trade disputes that exist or are pending may be reported to the Governor General by or on behalf of either party to a trade dispute. The Governor General may, if both parties consent, refer the dispute to an arbitration panel for settlement. The arbitration panel must issue an award that is consistent with national employment laws. The arbitration panel may permit interested persons to be represented by legal counsel. These bodies may conduct proceedings in public or private. The Trade Disputes Act provides that alternative dispute mechanisms are available as a means for settling disputes between two private parties. Voluntary mediation or conciliation is also recognized as an avenue to dispute resolution. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.
The country’s bankruptcy framework is governed by the Bankruptcy and Insolvency Act and grants certain rights to debtor and creditor. The 2018 World Bank Doing Business Report addresses the strength of this framework and its limitations, ranking St. Vincent and the Grenadines 168th of 190 countries in resolving insolvency.