- Drafting of the Insolvency Legislation began in 2014 and has undergone many iterations and stakeholder engagements.
- “This legislation is necessary because it will shape our relationship with financial institutions, both locally and globally – World Bank, CDB, IMF.”
- “This bill will require massive public education to explain the purpose, provisions, and implications of the bill.”
By Caribbean News Global contributor
CASTRIES, St Lucia – The drafting of the Insolvency Legislation which began in 2014 and has undergone many iterations and stakeholder engagements, was passed in the parliament of Saint Lucia on September 16, 2024. The Senate has done the same. Royal Assent is expected by the Sovereign of a bill – the acting governor-general now that both chambers of parliament have adopted in identical form.
“This bill offers many advantages to consumers and provides a level of protection for them,” cites the attorney general. These advantages include:
- Permitting a borrower to negotiate a partial or total wipe-off of their debts;
- Establishing a low-cost out-of-court restructuring process where borrowers can work with creditors to negotiate a mutually beneficial solution;
- Giving borrowers the power to stop creditors from pursuing them;
- Allowing borrowers to halt the sale of their assets while they resolve debt payments.
Insolvency occurs when an individual or company can no longer meet their debt obligations. For a business, this means that its liabilities exceed the value of its assets and income, Glen Simon, National Competitiveness and Productivity Council (NCPC) reports.
One that is most significant to Prime Minister, Minister Philip J. Pierre “is the protection of the homestead,” he continued. “This bill allows for the protection of the primary residence of a debtor, where a certain amount of a debtor’s equity in their primary residence is exempt from creditors.”
The prime minister emphasized that this legislation will modernize not only the credit sector in Saint Lucia but also the relationship between creditors and debtors, stating:
“This legislation will modernize the entire environment. When someone – whether a business or an individual – is under financial pressure, they will be able to approach their creditor and say, ‘I am under pressure; let’s talk.”
The NCPC is scheduled to lead a public education campaign to inform the public about the provisions and benefits of the Insolvency Legislation.
Kenny D. Anthony stressed the importance of explaining to the general public the implications and transformation this legislation seeks to create: “This bill will require massive public education to explain the purpose, provisions, and implications of the bill.”
Alfred Prospere highlighted the importance of the insolvency legislation for fishers and farmers:
“This bill we are passing today is not a bill to take possession of your home if you cannot pay the bank for a few months. So, the fishermen and farmers who might have a mortgage and find themselves in difficulty after a hurricane, unable to sell their provisions, will be able to sit down, engage with the banks, and have a discussion.”
The leader of the opposition presentation was made easy; describing the intention, subject to the detail of the bill, alluding to the presentation by Kenny Anthony.
World Bank supports St Lucia’s fiscal and green reforms for sustainable recovery
“To improve the business environment, the project includes measures to help implement the Insolvency Bill and Security Interest in Moveable Property Act, which make it easier for businesses to access funds.” ~ World Bank.
The World Bank
Saint Lucia Sustainable Recovery Development Policy Credit (P179539) – IDA PROGRAM DOCUMENT FOR A PROPOSED CREDIT TO ST. LUCIA
“… 3. The proposed operation consists of two complementary pillars: Pillar 1 supports strengthening fiscal revenues and improving transparency by introducing a health and citizen security levy (HCSL) as well as increases to the excise tax on cigarettes. It also supports the new public financial management (PFM) regulations, public procurement regulations, and the promulgation of the Public Debt Management Act. Improving the fiscal framework is critical for safeguarding fiscal sustainability and reducing the country’s vulnerability to external shocks, including those related to climate change.”
“Pillar 2 focuses on promoting green and resilient private sector growth, by supporting climate change mitigation and adaptation as well as reforms to improve the business environment. It seeks to enhance access to finance through the Insolvency Bill and Security Interest in Moveable Property Act, while the National Energy Policy is expected to help accelerate the transition to a low-carbon economy by encouraging the development of renewable energy sources, reducing energy imports and costs, and improving climate change adaptation. Pillar 2 also supports the Climate Change Bill which codifies an overarching legal framework to address the impacts of climate change and embeds related considerations, including those related to mitigation, into existing and new sectoral laws, with strong emphasis on private sector engagement.” […]
The US Department of State – 2023 Investment Climate Statements: Saint Lucia, notes in-part:
- Saint Lucia had an estimated Gross Domestic Product (GDP) of $1.69 billion in 2021 according to the latest figures obtained from the World Bank. The Eastern Caribbean Central Bank (ECCB) did not produce any figures for Saint Lucia in the reporting period. Tourism is Saint Lucia’s main economic sector, while real estate and call centers are other leading sectors.
- As of May 2023, the International Monetary Fund (IMF) forecast the Saint Lucian economy to grow by 3.0 percent by the end of 2023.
- The government is prioritizing investment in key areas of tourism, real estate development, manufacturing and agro-processing, and global business outsourcing.
- The government of Saint Lucia provides several incentives to encourage domestic and foreign private investment. For example, foreign investors in Saint Lucia can repatriate all profits, dividends, and import capital.
- Saint Lucia does not have a bilateral investment treaty with the United States but has bilateral investment treaties with Germany and the UK. Saint Lucia recently became the sixth member of the Caribbean Community (CARICOM) to become a full member of the Caribbean Court of Justice (CCJ), making the CCJ its final court of appeal.
- In 2014, the Government of Saint Lucia signed an Intergovernmental Agreement in observance of the US Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Saint Lucia to report the banking information of US citizens.
- The Saint Lucian government encourages investment in all sectors, but targeted sectors include tourism, manufacturing and agro-processing, global business outsourcing and real estate development.
- The government allows 100 percent foreign ownership of companies in any sector. The government of Saint Lucia treats foreign and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
- In May 2023, the World Trade Organization (WTO) conducted a trade policy review of the OECS of which Saint Lucia is a member. WT/TPR/S/437 • Saint Lucia.
- Saint Lucia does not have a bilateral investment treaty with the United States. It has bilateral investment treaties with Germany, the UK, and the Caribbean Community (CARICOM). Saint Lucia has signed taxation agreements with other CARICOM countries. There is no taxation treaty with the United States, but there is a bilateral Tax Information Agreement.
- Saint Lucia is also party to the following: CARICOM, OECS, Caribbean Basin Initiative, CARIFORUM-EU Economic Partnership Agreement, CARIFORUM-UK Economic Partnership Agreement, Caribbean/Canada Trade Agreement
- The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Saint Lucia’s AML/CFT controls were generally in technical compliance with international standards. The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.
- Saint Lucia’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to ensure the fulfillment of its various treaty obligations, although there are some minor differences in implementation from country to country. The enforcement mechanisms of these regulations include financial penalties and other sanctions.
- Saint Lucia has a limited bankruptcy framework that grants certain rights to debtors and creditors. The act was updated in 2020.
- Saint Lucia is a signatory to the Washington Treaty on Intellectual Property in Respect of Integrated Circuits, the WIPO Performances and Phonograms Treaty, the WIPO Copyright Treaty, the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks, and the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms.
- There are 39 SOEs in Saint Lucia operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture. SOEs are wholly owned government entities and are headed by boards of directors to which senior management reports. A list of SOEs in Saint Lucia is available here.
- Government agencies involved in enforcement of anti-corruption laws include the Royal Saint Lucia Police Force, the Director of Public Prosecutions, the Integrity Commission, and the Financial Intelligence Unit.
- The country is a party to the Inter-American Convention against Corruption and acceded to the United Nations Convention against Corruption in 2011.
