Transparency of the Regulatory System
In April 2006, Guyana’s Parliament passed the Competition and Fair Trading Act, which serves as a partial fix for the country’s lack of comprehensive anti-trust legislation. The Competition Act targets offenses such as price fixing, conspiracy, bid-rigging, misleading advertisements, anti-competitiveness, abuse of dominant position, and resale price maintenance. A Competition Commission with authority to review anti-competitive business practices exists, but remains understaffed.
Historical factors, Guyana’s small population, and its limited economic base have led many sectors to be dominated by one or two firms. Bureaucratic procedures appear cumbersome and often require the involvement of multiple ministries. Investors often receive conflicting messages from various officials, causing difficulty in determining where the authority for decision-making lies. In the absence of adequate legislation, much decision-making remains centralized. An extraordinary number of issues continue to be resolved in Cabinet, a process that is commonly perceived as not transparent nor fast. Attempts to reform Guyana’s many bureaucratic procedures have not succeeded in reducing red tape.
Guyana’s budget and information on debt obligations are widely and easily accessible to the general public, including online at (https://finance.gov.gy/?cat=8 , https://www.bankofguyana.org.gy/bog/economic-financial-framework/publications/annual-reports ). Draft pieces of legislation are available in the Parliament Library and on the National Assembly website (http://parliament.gov.gy/ ) for public review.
International Regulatory Considerations
Guyana is a member of the Caribbean Community (CARICOM) and seeks to harmonize its regulatory systems with the rest of the members.
Forest Stewardship Council, Verification and Legal Origin, REDD+, and EU-FLEGT are some of the norms incorporated in the regulations.
Guyana has been a World Trade Organization (WTO) member since 1995 and adheres to Trade-Related Investment Measures (TRIMs) guidelines.
Legal System and Judicial Independence
Guyana’s legal system, like most Commonwealth countries, follows the English Common Law system. However, vestiges of the Roman-Dutch legal system still remain, especially in the areas of land tenure. In early 2005, legislative amendments were made to allow Guyana’s accession to the Caribbean Court of Justice as its final Court of Appeal.
Guyana’s Supreme Court of Judicature hears both criminal and civil matters. Therefore, the Supreme Court in its civil jurisdiction has the standing to hear intellectual property claims. Though the Constitution of Guyana provides for the independence of the judiciary, in practice the executive has some influence over the judicial branch of the government. The hearing of civil matters is a slow process and many perceive it to be unfair. Judgments of other courts within the Commonwealth are considered judicial precedents if Guyanese laws are silent.
According to some reports, suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana. In order to redress this obstacle to investment, the GoG, with support from the Inter-American Development Bank (IDB), established a Commercial Court in June 2006. Given Guyana’s growth potential, there is need for expansion and strengthened capacity in the near future.
Laws and Regulations on Foreign Direct Investment
Sufficient legislation exists in Guyana to support foreign investment in the country, but implementation of relevant legislation continues to be inadequate. The objectives of the Investment Act of 2004 are to stimulate socio-economic development by attracting and facilitating foreign investment. Other relevant laws include the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. Regulatory actions are still required for much of this legislation to be effectively implemented.
There are no known examples of executive interference in the court system that has adversely affected foreign investors. The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The 2018 World Bank’s Doing Business Report states that it takes 581 days to enforce a contract in Guyana. Given Guyana’s growth potential, there is need for expansion and strengthened capacity in the near future.
Competition and Anti-Trust Laws
The Competition Commission created by the Competition and Fair Trading Act of 2006 falls under the Ministry of Business. The Act seeks to promote, maintain, and encourage competition; to prohibit the prevention, restriction, or distortion of competition and the abuse of dominant positions in trade; and, to promote the welfare and interests of consumers and to establish a Competition Commission for connected matters.
The Commission is responsible for reviewing all commercial activities, identifying those that adversely affect the economic interest of consumers; investigating businesses, which do not comply with the Act; and, conducting inquires in connection with any matter falling within the provisions of the Act.
Expropriation and Compensation
The government can expropriate property in the public interest under the Acquisition of Land for Public Purposes Act 2001.
Prior to 1989, there was a history of expropriations.
As mentioned under the Laws and Regulations on Foreign Direct Investment section, there is sufficient legislation in Guyana to promote and protect foreign investment. However, implementation of the legal framework remains inadequate, and the judicial system is slow and ineffective in enforcing legal contracts. There have been no recent cases of expropriation. All companies should conduct due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.
ICSID Convention and New York Convention
Guyana is a member state to the International Centre for Settlement of Investment Disputes (ICSID Convention). Additionally, Guyana has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which went into force in December of 2014.
Investor-State Dispute Settlement
Guyana does not have a bilateral investment treaty with the United States. Negotiations began in 1993, but broke down in 1995. Since then, the two countries have not conducted any subsequent negotiations.
Double taxation treaties are in force with Canada (1987), the United Kingdom (1992), and CARICOM (1995). Other double taxation agreements remain under negotiation with India, Kuwait, and the Seychelles. The CARICOM-Dominican Republic Free Trade Agreement provides for the negotiation of a double taxation agreement, but no significant developments have occurred since March 2009.
There are two ongoing investment disputes involving U.S. interests in Guyana.
U.S. company Atlantic Tele-Networks owns 80 percent of Guyana Telephone and Telegraph (GTT). The current government would like to end GTT’s monopoly on international data transmissions and open the sector up to more competition. GTT’s main competitor, DigiCel, is sending data to a satellite facility in Suriname, allegedly illegally bypassing GTT’s international data link. Despite GTT’s protests to the government, Digicel has continued to operate, apparently in violation of the monopoly agreement. GTT is also accused of owing $44 million in back taxes, which could be used to negotiate out the monopoly. All three issues are linked, and negotiations between the government and GTT are proceeding.
U.S. company Caribbean Telecommunications Ltd. has filed a lawsuit against Guyana Telephone and Telegraph (GTT), alleging that GTT engaged in unfair trade practices in order to cancel the company’s license to provide cellular services in Guyana.
International Commercial Arbitration and Foreign Courts
International arbitration decisions are enforceable under the Arbitration Act of British Guiana of 1931, as amended in 1998. The Act is fashioned from the Geneva Convention for the Execution of Foreign Arbitral Awards of 1927. Enforcement of foreign awards is done by way of judicial decisions or action, and must be in line with the policies and laws of Guyana.
According to the World Bank’s Doing Business report, resolving disputes in Guyana takes 581 days, and costs 27 percent of the value of the claim. According to many businesses, suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana.
A Commercial Court has been set up to expedite commercial disputes, but this court only has one judge presiding and companies have reported that it remains currently overwhelmed by a backlog of cases.
To distinguish itself from the previous administration, which some report it ignored several commercial judgments against Guyana by the Caribbean Court of Justice, the current administration has proactively agreed to respect court decisions.
The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings. According to data collected by Doing Business, resolving insolvency in Guyana takes three years on average and costs 28.5 percent of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal. The average recovery rate is 18 cents on the dollar. Globally, Guyana stands at 162 in the ranking of 190 economies on the Ease of Resolving Insolvency.
The 2004 Financial Institutions Act gives the Central Bank power to take temporary control of financial institutions in trouble. This Act provides legal authority for the Central Bank to take a more proactive role in helping insolvent local banks.