Another Government nationalization: another legal battle for registries

In 2009, the government of Belize nationalized the telephone company, B.T.L. and the electricity company, B.E.L.  Today, government went further and took over control of the Belize International Services Limited (BISL) which manages the International Business Companies Registry (IBCR) and the International Merchant Marine Registry of Belize (IMMARBE). That action will land the government in another round of expensive court battles. The appropriation of the two companies housed on the first floor of Marina Towers on Princess Margaret Drive was sudden and swift. Minutes before nine this morning Marion Palacio, the Deputy Financial Secretary in the Ministry of Finance and about a dozen other GOB employees assumed control of the IMMARBE and the IBCR.  This afternoon, the managing company, BISL, expressed surprise, disappointment and indignation at the government’s unilateral decision to take over the companies and served notice that it will vigorously fight it in the courts and will exercise all options to vindicate its rights.  BISL says it has contracts that are lawful, binding and enforceable since 1991 through June 2020. According to the BISL release, just prior to the take-over, it received a tax assessment from the Government’s Tax Commissioner in excess of thirty million dollars even though the contract with the government exempts it from taxes, fees and other assessments. And as such, the company has not been taxed nor had the emoluments of the personnel employed overseas. BISL says that it is an arbitrary act by the government and a breach of contract which will expose the government to “expensive litigation which will be saddled on the back of Belizean taxpayers.” According to BISL, the government will also become liable for an amount estimated to be in excess of sixty million U.S. dollars in damages with obvious implications for the recently concluded Superbond negotiations.  The release continues by saying that since it was established, the company has made contributions that include thirty-six million U.S. dollars in fees to G.O.B. It also lists the incorporation of a hundred and thirty-two thousand international business companies, over seven thousand registered ships, the employment of hundreds of persons.  This afternoon, News Five spoke to Palacio from his new office at IMMARBE.

Marion Palacio

He indicated that it’s a transitional phase that will continue over the next few days. However, he told News Five Jose Sanchez that he has taken up two posts; the deputy registrar of IBCR and the Senior Deputy Registrar for IMMARBE. The takeover was executed with two statutory instruments penned by Gian C. Gandhi, Director General of the International Financial Services Commission and ex officio Registrar of International Business Companies. The takeover’s S.I. was also signed and approved by Prime Minister Dean Barrow. Barrow will hold a press conference on the takeover on Wednesday morning at the Best Western Biltmore. Following the examples of Telemedia and Belize Electricity Limited, this is the third nationalization that the Government of Belize has executed during the Barrow administration. Of note is that the government is yet to pay compensation to the owners of B.T.L. and B.E.L. Click here for a full text of the release.