Article 25 trumps article 16 of the Kingdom Law on Financial Supervision.

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Member of Parliament Hon. George Pantophlet

 

The conclusion I have come to after reading a letter dated October 19, 2020 sent by the Minister of Finance Ardwell Irion to State Raymond Knops is that article 25 of the Kingdom Law on Financial Supervision trumps articles 16 of the same Law. A text from the advices of the Department of Judicial Affairs and Legislation from the Ministry of General Affairs both from St. Maarten in my interpretation explains the matter clearly.

Article 16 outlines the rules and procedures that are to be followed when attracting loans for capital expenditures. And as the Minister of Finance explained and I quote; “the bond being floated for St. Maarten was not for capital expenditures, but to cover the cost of government operations, including social services such as the food voucher program, programs under the St. Maarten Stimulus and Relief Plan (SSRP) such as the income and unemployment support initiative” end of quote.

These are vital to the people of St. Maarten. What I find extremely irresponsible is the fact that the Committee for financial supervision did not do its proper due diligence. Had they done so, they would have known that article 25 trumps article 16 of the same Kingdom Law on Financial Supervision. The advice presented to the Minister of Finance a text of which was sent to State Secretary Raymond Knops was very clear and gave a historical narrative of the reasons why I come to the conclusion as stated.

The advice to the Minister of Finance explained that deviation from Article 25 is allowed when it comes to extra ordinary instances such as restoration of damages caused by natural disaster, the government of St. Maarten can do so in agreement with a decision from the Kingdom Council of Ministers. According the advice given to the Minister of Finance, permission to deviate was granted by the Kingdom Council of Ministers on March 16, 2018 for the 2017 and 2018 Budgets, permission was again given on November 23, 2018 for the 2019 Budget.

Repeated again on March 27, 2020 for the 2020 Budget. The letter also explains that although the Committee for Financial Supervision has no decision making authority when it comes to article 25 to deviate from the procedures in article 15 they were advising such, however this should not be the case as was done in their letter dated June 24, 2020 to Prime Minister Mark Rutte and their email of October 14, 2020. This action has caused fear amongst potential subscribers to the 75 million Guilders bonds. These funds could have been used to pay off the 50 million bond loan which matured October 21 with a remaining balance of 25 million which definitely needed.

What was also noted in St. Maarten’s advice is that in article 2 subsection 6 and 8 of the National Ordinance stipulates that the Minister of Finance is authorized to enter into agreements for loans that are necessary in the amount of 140.500,00 million guilders related to covid19. The Committee for Financial Supervision must apologize to the people of St. Maarten for this blunder. Finally, in my opinion the Kingdom Council of Ministers have set a precedent when it comes to article 25 (which the people of St. Maarten appreciates) which has to be continued seeing that the financial situation of St. Maarten has not yet been restored to the point where adherence to the Budgetary norms are not realistic.

George Pantophlet
Member of Parliament