Transparency of the Regulatory System
Suriname does not use transparent policies and effective laws to foster competition. The National Assembly has delayed its vote on a draft competition law. The Competitiveness Unit Suriname coordinates and monitors national competitiveness and is working towards establishing policies and suggesting proper legislation to foster competition. Current legislation such as tax, environment, health and safety, or other laws are not purposely used to impede investment, but may still form obstacles. Employment protection legislation is among the most stringent in the world. Labor laws, for instance, prohibit employers from firing an employee without the permission of the Ministry of Labor once the employee has fulfilled his or her probationary period, which by law is limited to two months. Tax laws are criticized for overburdening the formal business sector, while a large informal sector goes untaxed. The government continues to postpone the implementation of a value-added tax (VAT). The IMF instructed the government, under its economic reform program, to implement the value-added tax by 2018.
Legal, regulatory, and accounting systems are outdated and therefore not transparent and consistent with international norms. There is no overarching accounting and auditing legislation to set a national accounting standard, regulate the accountancy profession, or enforce requirements on financial reporting. Currently, there is neither a requirement for specific accounting standards nor a requirement for auditing unless specifically mentioned in the Articles of Association of the company. Most financial statements prepared in Suriname are based on The Netherlands Generally Accepted Accounting Principles (NL GAAP). However, Suriname’s major domestic corporations and multinational companies operating in Suriname often apply their own standards. Some larger firms use one of the resident international firms such as Deloitte Consulting or BDO international Ltd for their accounting needs.
There are no informal regulatory processes managed by non-governmental organizations or private sector associations.
Rule-making takes place on a national level (ministries) in consultation with relevant stake holders. After consultation, the government presents draft laws and regulations to the Council of Ministers for discussion and approval. Once approved at this level, the president’s advisory body, the State Council, considers the draft. If approved, the government presents a draft to the National Assembly for discussion, amendment, and approval.
Accounting, legal, and regulatory procedures are outdated and therefore not consistent with international norms. There are no accounting standards in place for publicly listed companies.
Draft bills or regulations are discussed with relevant stake holders, but are not made available for public comment.
The National Assembly publishes the actual text of approved legislation on its website.
The Auditor General’s office is an independent body in charge of supervising the financial management of government funds. The Auditor General’s Office reports to the National Assembly. The Central Accountant Service exercises control on administrative processes at the ministries and reports to the Ministry of Finance.
There is no centralized online location similar to the Federal Register in the U.S. where key regulatory actions are published.
The Tax Department announced that it is in the process of implementing an automated Standard Integrated Government Tax Administration System. The Ministry of Trade announced legislation to improve the ease of doing business via the introduction of new laws and programs, including an electronic trade law and online registration of liens.
The general implication of these reforms will be an overall increased ease of doing business due to heightened transparency and fewer hurdles to registering domestic or foreign enterprises.
Regulations are developed by ministries that have jurisdiction over the relevant area, in consultation with involved stakeholders.
It is unclear what the regulatory enforcement mechanisms are, as the process has not been made accountable to the public.
Regulation is not reviewed on the basis of scientific or data-driven assessments.
International Regulatory Considerations
Suriname is a member of CARICOM and therefore is committed to regionally-coordinated regulatory systems.
Suriname uses national and international standards. Standards developed by other (international/regional) standardization bodies that Suriname utilizes include: ISO, Codex Alimentarius, International Electro Technical Commission, CROSQ, ASTM International, COPANT, SMIIC (Standards and Metrology Institute for Islamic Countries), NEN (Nederland Normalisatie Instituut), ETSI, GLOBAL GAP, etc.
Suriname is a member of the WTO and notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade.
Legal System and Judicial Independence
Suriname’s legal system is based on the Dutch Civil system. Judges uphold the sanctity of contracts, and enforce them in accordance with their terms. When an individual or company disputes a signed contract, they have the right to take the case to court. The judiciary consistently upholds local law, applies it, and enforces it for local and international businesses.
Laws are defined in criminal, civil, and commercial codes and verdicts are based on the judge’s interpretation of those codes. There is no specialized commercial court or civil court. The commercial codes contain commercial legislation.
Generally, the judicial system is considered to be independent of the executive branch. With the exception of the December Murders Trial (related to political murders committed in 1982), most observers consider the judicial system to be procedurally competent, fair, reliable, and free of overt government interference.
Draft regulations are reviewed by involved stakeholders, and they can comment on amendments for inclusion before the draft regulation is passed to the National Assembly for approval. Since Suriname has no general administrative law, there are no special administrative tribunals. Judges of the regular courts also hear cases of administrative law.
Laws and Regulations on Foreign Direct Investment
The National Assembly approved the amendment of the commercial code chapter regarding the establishment of a limited liability company. Parameters addressing enforcement are forthcoming.
There is no primary “one-stop-shop” website for investment that provides relevant laws, rules, procedures, and reporting requirements for investors.
Competition and Anti-Trust Laws
Currently, there are no domestic agencies reviewing transactions for competition-related concerns. There is a draft competition bill pending review by the National Assembly. The CARICOM competition commission is based in Suriname, and it monitors potential anti-competitive practices for enterprises operating within the CARICOM Single Market and Economy.
Expropriation and Compensation
According to Article 34 of Suriname’s constitution, expropriation will take place “only for reasons of public utility” and with prior compensation. In practice, the government has no history of expropriations. However, Article 42 of Suriname’s constitution specifically refers to all natural resources as property of the nation, and states that the nation has inalienable rights to take possession of all natural resources to utilize them for the economic, social, and cultural development of Suriname.
ICSID Convention and New York Convention
Suriname is not a party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID). Suriname has been a member of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards since 1964, when the country was still a colony of the Netherlands. Upon becoming independent in 1975, Suriname automatically continued its membership in international conventions and treaties.
There is no specific domestic legislation providing enforcement of awards under the 1958 New York Convention and /or under the ICSID convention.
Investor-State Dispute Settlement
The government is signatory to Multilateral Investment Guarantee Agency (MIGA).
Suriname has no Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.
There have been no publicly known investment disputes in the past 10 years involving a U.S person or other foreign investor. Every effort is made to settle investment disputes outside the court system or via arbitration.
Judgments of foreign arbitral awards are enforced by the local courts only if Suriname has a legal treaty of jurisprudence with the foreign country involved. If not, the foreign judgment can be brought before the Surinamese court for consideration as long as the court determines it has jurisdiction and doing so does not otherwise violate any Surinamese laws. With Suriname’s participation and membership in the Caribbean Court of Justice, judgments from this court are also binding for local courts. Cases have been successfully filed against Suriname before the Inter-American Court of Justice and the Organization of American States. Judgments from these courts have been upheld by the Surinamese legal system.
There is no known history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
Suriname’s civil law includes options for arbitration. The government reactivated the Suriname Arbitration Institute (SAI) in August 2014 to offer arbitration and mediation services.
The SAI legislation is based on civil law, which includes options for arbitration. Furthermore, the SAI collaborates with the Dutch Arbitration Institute.
Local courts only recognize and enforce foreign arbitral awards if doing so is stipulated in the contract or agreement and it does not contradict local law. Foreign arbitration is an accepted means of settling disputes between private parties, but only if local alternatives are exhausted.
There have been no publicly known investment disputes in which SOEs are involved. Court processes are in general considered transparent and not discriminatory.
Suriname has bankruptcy legislation. Creditors, equity shareholders, and holders of other financial contracts, including foreign contract holders, have the right to file for liquidation of the debtors due to insolvency. In a case where there is a loan from a commercial bank, repayment of the bank loan takes precedence. Bankruptcy in principle is not criminalized. However, in cases where a board of directors encouraged a company to pursue bankruptcy to avoid creditors, courts have viewed these as a criminal offence. In the World Bank’s Doing Business Report, Suriname stands at 128 in the ranking of 190 economies on the ease of resolving insolvency.