St. Maarten Government takes Dutch Kingdom to court over debt relief

POSTED: 02/7/13 1:08 PM

GREAT BAY- St. Maarten has decided to take the Kingdom government to court over the closure of the debt relief program.  Finance Minister Roland Tuitt yesterday said that the Council of Ministers had made up its mind on Tuesday and will not let the monies, which were designated for the country to get a solid developmental start, go without a fight. The hunt is for 40 million guilders.

“This item will be going to court and let the court decide what is right and what was wrong in this whole process. The debt forgiveness issue was an integral part of the political development leading up to 10. 10.10. 10,” Tuitt said during yesterday’s Council of Ministers weekly press conference.

When St. Maarten obtained autonomy, the Netherlands was prepared to pay the island up to 183 million guilders to settle old debts. But St. Maarten only collected 65 million of these funds. The rest of the payments never materialized because the finance department did not manage to prove that other debts existed. The remaining funds have been returned to the Dutch general budget and according to Marijke Linthorst, leader of a delegation of visiting Dutch senators who visited here last month, they are now out of reach.

“Not because one minister forgot to give in the documentation relating the debt relief that could be a disqualification that was established in the Kingdom law. Because we made a mistake, that cannot be enough grounds to call off an agreement between two parties. The promise was made that this would give St. Maarten a new start. Based on the new start the other items in this Kingdom law has been established including the Cft. We will choose some lawyers and they will be dealing with this item in court,” Tuitt stated.

The door on debt relief for St. Maarten is closed forever, Home Affairs and Kingdom Relations Minister Ronald Plasterk reiterated last week in a letter to the Dutch Parliament wherein he sums up the results of his trip to the Caribbean part of the Kingdom in January.
“I have spoken firmly about the country’s finances,” Plasterk reports in his letter about his visit to St. Maarten. “My point of departure is that the Kingdom law financial supervision is not a goal in itself, but that the Kingdom law serves the functioning of the country St. Maarten for its  had talks in St. Maarten during the same week and it gave a negative advice about the draft budget and it also provided advice about adjusting the budget. It is now up to St. Maarten to submit a new budget within two weeks.”

His predecessors Liesbeth Spies and Piet Hein Donner took similar stances when it came to the debt relief for St. Maarten.

The road towards accessing debt relief has been hard fought by two political administrations. When former Finance Minister Hiro Shigemoto (United People’s Party) took office in 2010 he submitted numerous letters to the Kingdom government requesting the release of the funds.

However, the Kingdom government responded that St.Maarten had forfeited its rights to receive the entire 183 million guilder payment because it could not present undisputed SOAB verified financial statements that extensive debts existed. To be exact, only 65. 5 million guilders was paid to the pension fund, Apna; which is said to be the only organization that benefitted from the debt relief program.

The debt that could have been cleared with the outstanding money was up to the period December 31, 2005. However these were never properly documented by the Receivers’ Office during the country’s Island Territory days.

Payment arrears only qualify for debt relief after they have been verified by accountants based on established protocols.

With the fall of the UP/DP coalition came Shigemoto’s departure from office and when Tuitt assumed the position he also championed the cause for debt relief.

He initially favored bargaining with the Kingdom government after Dutch Finance State Secretary Weekers asked the country to exempt citizens and companies from the BES-islands who buy goods here from the turnover tax.

In January Tuitt said that he would have used that key to open the Dutch’s treasure chest.  But with every new political administration, the Netherlands’ response has been the same loud, no.

Without debt relief, the country is hard pressed to meet many of the commitments in the Kingdom charter. Money that could have been used in the budget to build up institutions and fund programs such as those by NGOs, will continue to be pumped into clearing off old debts.

St. Maarten’s representative on the Cft, attorney Richard Gibson told Parliament two weeks ago that St. Maarten should never give up on trying to access the funds.

Now that the government plans to settle the dispute legally, Tuitt indicated that no decision has been taken yet on which court the government will take its case to. He said that St. Maarten will follow the advice of its legal team and lodge a petition at the institution that they perceive will result in a favorable outcome based on a proven success rate.

When all the dust settles St. Maarten still has to deal with a 200 million guilders ($111.1 million) debt to the Netherlands. This is the result of agreements about the division of debts that remained after executing the debt relief program. The Netherlands took over these debts and then assigned them to the new entities (the BES-islands, Curacao and St. Maarten).

This method was chosen to avoid a cumbersome process of dividing these debts over the new entities. This gave the Netherlands a claim on St. Maarten and the other entities based on the cash value of the debt.

 

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