Transparency of the Regulatory System
The Government of St. Lucia provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. The Ministry of Commerce, Industry, Investment, Enterprise Development and Consumer Affairs, and Invest St. Lucia provide oversight on the transparency of the system as it relates to investment. The government offers a wide framework of incentives for foreign investors. The Invest St. Lucia Act, No. 14 of 2014, addresses government policy for attracting investment. The Trade License Act, Aliens Licensing Act, Development Incentives Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Tourism Development Act, and Fiscal Incentives Act all impact foreign investment, as well.
Rule making and regulatory authority lies with the bicameral Parliament of the Government of St. Lucia. The Parliament has two chambers, which consist of 17 members elected for a five year term in single-seat constituencies to the lower house, and 11 appointed members appointed to the Senate.
All regulations relating to foreign investment in St. Lucia are governed by the nation’s laws. These laws are developed in the respective ministries and drafted by the Ministry of Home Affairs, Justice and National Security. These laws are enforced by the applicable ministry or ministries. The attraction of FDI is governed principally through the laws that oversee Invest St. Lucia and the Citizenship by Investment Program. St. Lucia’s laws are available online at http://www.govt.lc .
Although, some draft bills are not subject to public consultation, input from various stakeholder groups and town hall meetings may be enlisted as part of the formulation of new legislation. Public awareness efforts such as television and radio call-in programs are used to inform and shape public opinion. Copies of proposed laws and regulations are published in the Official Gazette before being presented in the House of Assembly. Although St. Lucia does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice. The government maintains an information service website on which it posts information such as directories of officials and a summary of laws and press releases. The government budget and an audit of that budget are available on the website. 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 accounting profession in St. Lucia.
The Office of the Parliamentary Commissioner or Ombudsman is a constitutional provision to guard against excesses by government officers in the performance of their duties. The Office of the Ombudsman is independent and not subject to the direction or control of any other person or authority. The Ombudsman investigates complaints relating to any government official’s or body’s action or failure to act, where such results in an injustice or an aggrieved member of the public.
Regulations are developed nationally and regionally. At the national level, the respective ministries advise the Ministry of Home Affairs, Justice and National Security regarding necessary elements and parameters of the proposed legislation. The Ministry of Home Affairs, Justice and National Security subsequently drafts the legislation, ensuring compatibility with the nation’s domestic and international legal commitments. Invest St. Lucia has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.
St. Lucia’s membership in regional organizations, particularly the Organization of Eastern Caribbean States and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the 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.
International Regulatory Considerations
As a member of the Organization of Eastern Caribbean States and the Eastern Caribbean Economic Union, St. Lucia 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, St. Lucia is obligated to implement regionally developed regulations, such as legislation passed under Organization of Eastern Caribbean States Authority, unless specific concessions are sought.
The St. Lucia Bureau of Standards is a statutory body established under the Standards Act, No. 14 of 1990. It establishes, maintains and promotes standards for improving industrial development and efficiency, promoting the health and safety of consumers as well as protecting the environment, food products, citizen quality of life and the facilitation of trade. It also conducts international standards consultations and training. As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, St. Lucia is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade. St. Lucia is working to improve customs efficiency, modernize customs operations, and address inefficiencies in the clearance of goods.
Legal System and Judicial Independence
St. Lucia bases its legal system on the British common law system but its civil code and property law is greatly influenced by French Law. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice. The Eastern Caribbean Supreme Court 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 Organization of Eastern Caribbean States members. Final appeal is to the Judicial Committee of the Privy Council of the United Kingdom.
The Caribbean Court of Justice is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The Caribbean Court of Justice has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In its appellate jurisdiction, the Caribbean Court of Justice considers and determines appeals from Member States of CARICOM, which are parties to the Agreement Establishing the Caribbean Court of Justice. Currently, St. Lucia is subject only to the original jurisdiction of the Caribbean Court of Justice.
The United States and St. Lucia are both parties to the World Trade Organization (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 St. Lucia’s FDI policy is to actively pursue FDI in priority sectors and advise the government on the formation and implementation of policies and programs to attract sustainable investment in St. Lucia. All proposals for investment concessions and incentives are reviewed by Invest St. Lucia to ensure the projects are consistent with the national interest and provide economic benefits to the country.
Invest St. Lucia provides “one-stop shop” facilitation services to investors to guide them through the various stages of the investment process. Invest St. Lucia offers a website that is useful to navigate the laws, rules, procedures and registration requirements for foreign investors: http://www.investstlucia.com/ .
Under St. Lucia’s Citizenship by Investment Program, foreign individuals may obtain citizenship in accordance with the Citizenship by Investment Act of 2015, which grants the right to citizenship by investment. Program applicants are required to submit to a due diligence process before citizenship can be granted. The minimum investment for a single applicant to qualify is a USD 100,000 contribution to the National Economic Fund. A USD 190,000 contribution applies to a family of four made up of the principal applicant, spouse and up to two dependents. Alternatively, a real estate purchase valued at USD 300,000 or more will also qualify. There are also provisions for enterprise investment in approved projects. More information on the CIP is available at https://www.cipsaintlucia.com .
Competition and Anti-Trust Laws
Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to Caribbean Community (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. Lucia. The Organization of Eastern Caribbean States 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 Home Affairs, Justice and National Security 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. St. Lucia employs a system of eminent domain to pay compensation when property needs to be acquired in the public interest. There were no reported tendencies of the government to discriminate against U.S. investments, companies or landholdings. There are no laws forcing local ownership in specified sectors.
There is one disputed case of expropriation involving an American citizen-owned property. An American citizen purchased 32 acres of land in St. Lucia in 1969. It was expropriated in 1985 by an act of law and the claimant sought redress since that time. In July 2014, the Cabinet of Ministers denied the claimant’s application to rectify the land registry in his favor. However, in subsequent recognition of certain questions of fairness associated with the cabinet’s review process, the Government of St. Lucia established a committee to further review this and other similar cases in an attempt to resolve the claim. To date, however, a government judgment as to the disposition of the property remains pending.
ICSID Convention and New York Convention
St. Lucia is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of October 14, 1966, but not a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards; also known as the New York Arbitration Convention. The Arbitration Act (2001) provides general and specific provisions on arbitration rules and procedures in St. Lucia.
Investor-State Dispute Settlement
Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. St. Lucia does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in St. Lucia.
The country’s court system is generally seen as being slow, with cumbersome bureaucracy widely seen as main hindrances to timely resolutions of commercial disputes. Reflecting these challenges, the 2017 World Bank’s Doing Business Report assessed that St. Lucia’s dispute resolution mechanisms took an average of 635 days. The country ranks 71st out of 190 countries in resolving contracts in the same Doing Business Report. Through the Arbitration Act of 2001, the local courts recognize and enforce foreign arbitral awards issued against the government. In 2016, St. Lucia established a Commercial Court, which should improve the efficiency of contract enforcement and dispute resolution.
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 Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.
St. Lucia has a limited bankruptcy framework that grants certain rights to debtor and creditor. The 2017 World Bank Doing Business Report addresses the strength of this framework and its limitations, ranking St. Lucia 114th of 190 countries in resolving insolvency.