Headline — 01 February 2017 — by Adele Ramos
13 Senators united on bills to protect foreign reserves

BELIZE CITY, Mon. Jan. 30, 2017–All 13 Senators—including the newest addition to the upper house of Parliament, Senator Osmany Salas, representative of the NGO community—gave their support for a pair of bills rushed through Parliament over the past two business days in what has been described as an emergency maneuver to shield the foreign reserves of the Central Bank of Belize from the claws of companies controlled by British billionaire Lord Michael Ashcroft, seeking to have arbitral awards of US$50 million enforced via court order in the US court in the District of Columbia.

There has been much back-and-forth about what got Belize in the place that it now finds itself —”between the devil and the deep blue sea,” as Senator Elena Smith, representative of the trade unions and civil society, put it during today’s debate.

Senator Rufino Lin, representing the private sector in the Senate, said: “We cannot afford to give away our hard-earned foreign reserve dollars to satisfy unbridled greed…”

Lin, who said that Belize has been betrayed from within and without in the signing of agreements that, he said would merely make Belizeans “servants of the lord”, added that the private sector would experience severe hardship if the seizure of the Central Bank’s foreign reserves were to happen, and such a move could trigger a series of events that could lead to the complete failure of the private sector.

“We cannot risk the financial stability of Belize or its exchange rate,” said Lin, who also works as general manager for Sol Belize Limited.

Lin also verbalized what most Belizeans have been saying—that they are tired of litigation after litigation, and the high cost with which the country has been saddled as a result.

The fiscal imbalance is such that we are not in a position to continue spending more and more resources on litigation fees, when those funds could be invested elsewhere to provide better social services, the Senator offered.

“What a pickle we are in!” said Senator Salas.

Salas said that they are faced with a situation where if immediate action is not taken, Belize risks having the foreign reserves frozen or losing them altogether, which, he said, would lead to more chaos in the national economy and undermine the wellbeing of citizens.

Salas also commented that, “We are here because of the deteriorating practice of governance exemplified by both major political parties…”

“Where was the love for our country and people when those nefarious ideals were being discussed?” Salas questioned, describing the actions as “despicable.”

Notably both the political parties, the ruling United Democratic Party and the Opposition People’s United Party, gave their blanket support for the duo of bills when the House met on Friday.

During that session, Prime Minister and Minister of Finance Dean Barrow pointed to the US Foreign Sovereign Immunities Act of 1976, under which he said the reserves of foreign countries are afforded protection; but Salas said that there is no guarantee and those assets are still not completely secure. He said that there have been some challenges to the law over time, as well as some changes, and courts have eroded the special protection provided under that act.

Salas suggested that these costly litigation wars between Ashcroft and the Barrow administration may not go away any time soon.

Senator for the UDP, Aldo Salazar, said that Belizeans must deter any attempt to collect on sums which the court within the country’s jurisdiction has said are undemocratic and unconstitutional, referring to a prior ruling by the Caribbean Court of Justice, Belize’s highest court. Salazar gave the bill his full support.

Senator Smith asserted that both governments, that led by the PUP and that led by the UDP, have made some questionable decisions.

She said that, “…one government started the mess and the other added to the mess. That is the truth of the matter, we cannot hide from that.”

However, she said that failure to protect Belize’s foreign reserves now will be “detrimental to people and economy.”

Smith said that she is aware that if we borrow or owe, we must pay; but she is also “aware of the fact that sometimes persons tend to use, if I should say, the backdoor to get what they want or to get what does not belong to them.”

Senator Eamon Courtenay, SC, PUP Senator and a local attorney for the Ashcroft group, took on the Barrow administration for not having put up a fight during the arbitration proceedings.

“When Belize was taken to arbitration, who defended the interest of Belize? Did the Government of Belize defend the interest of Belize in the arbitration? Did the Government of Belize hire any attorney to represent Belize’s interest in the arbitration? The answer is no, no, no!” Courtenay said, adding that this point was also raised by the CCJ.

The result, he said, was that the panels ruled against Belize to the tune of tens of millions of dollars in multiple cases.

“No one defended the interests of Belize and it begs the question: Has there been a dereliction of duty? Has there been negligence?” Courtenay continued to press.

Had the government won at arbitration, Courtenay said, it could have saved considerable expense; but there was a deliberate decision not to fight arbitration, he said.

The Senator went on to say that no one, including him, would vote against the bill before the Senate today, but he felt that it was important to look at what is being said.

As for the second bill tabled and unanimously passed in the Senate, criminalizing any attempt, even overseas, to enforce the arbitration awards of the type frowned upon by the CCJ, Courtenay said, there is a question over whether or not that is constitutional.

He went on to say that if the foreign reserves are immunized by the first bill tabled and cannot be reached, if there is confidence that the reserves are immunized, why is it necessary to go a further step to allow people to go to prison because they say we disagree.

UDP Senator Stephen Duncan argued that the decision by Prime Minister Barrow back in 2008 to repudiate the accommodation agreement—central to the protracted litigation between the Barrow administration and Ashcroft— means that “…we have one cumulative effect by accelerating the payments by bringing it to an end. We could debate which is better or which is worse but the fact is we would have paid.”

Duncan said that the disputed agreement caused the country to be saddled with heavy costs the minute it was signed. He said that the Ashcroft company would have been able to determine how much money they got each year under the agreement; it was so open-ended that it cannot be quantified what it would have cost had it been allowed to run its course, as no parameters were set to determine what could be claimed and what could not be claimed.

“One way or the other, we would have paid,” Duncan persisted.

PUP Senator Valerie Woods said that this has not benefited Belizeans—but attorneys, those connected with both the UDP and PUP – and she was sure to name, among them, her husband, Godfrey Smith, SC, who has served as Ashcroft’s attorney, as well as her friend and colleague, Senator Courtenay.

“Quite frankly, Belizeans young and old of every ethnicity … are simply sick and tired of all these legal games…” Woods said. “Games have been played; games are being played and they are being played by all sides. And it needs to stop!” she said.

On the bill passed today, Smith said: “Whether it has any teeth in the international arena is another matter…”

In wrapping up the debate on the Central Bank of Belize (International Immunities) Bill, 2017, Leader of Government Business, Senator Godwin Hulse, representative of the ruling party, reaffirmed that the bill in question is being advanced to protect the foreign reserves and not link them with the Government of Belize’s assets “so that it cannot be attached or garnished.”

Hulse argued that the immunity is already there, but the legislation “is to make doubly sure.”

The 13 Senators also approved the Crown Proceedings (Amendment) Bill, under which fines and jail time are being introduced as penalties to criminalize attempts to have the Central Bank’s reserves seized overseas.

Whether this legislative maneuver will trigger further litigation remains to be seen—but the parties fully expect that it will. UDP Senator Michael Peyrefitte said that Parliament cannot legislate that there will be no litigation, but he hopes that the parties can get to the point where things will be settled enough that it makes no sense for people to sue.

He said that when the Government fights litigation, much mention is made of the high litigation costs, but when the Government does not engage in the litigation, as in the case of the foreign arbitration, they are chastised.

“We are damned if we do, and damned if we don’t,” Peyrefitte said.

“We are dealing with an individual who does not respect us and has no care and love for us… So we have to make it clear in legislation that if you don’t respect it, you will go to jail,” Peyrefitte said.

At the end of the day, all Senators also voted unanimously for the Crown Proceedings (Amendment) Bill.

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