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Government takes over ship registry to avert EU sanctions

The Government of Belize has taken control of the International Merchant Marine Registry of Belize (IMMARBE) to prevent a ban on Belize’s marine exports to the European Union.

Speaking at a press conference on Wednesday, Prime Minister Dean Barrow explained that the EU has served Belize a written notice saying “that unless you [the government of Belize] get control of the registry and do something to regularize the operations of registry and in particular of the fishing fleet – you will have exports to EU banned.”

Belize was among seven countries cited by the EU Commission in April, due to what the EU described as the illegal and unregulated practices of their fishing vessels.

IMMARBE registers international vessels, allowing them to use the Belizean flag as a flag of convenience.

Apart from the potential EU ban, Barrow stressed that the IMMARBE take over is justified and cannot be likened to the nationalizations of Belize Telemedia and Belize Electricity Limited, because it was done on a “completely legal basis.”

Barrow explained that his administration—informed by the documents they had their possession—expected the contract with the company to end on Monday, June 10.

However, after having notified the company, the government was then furnished with documents showing that former prime minister, Hon. Said Musa, had granted the company an extension, which Barrow labelled as a “secret agreement”, signed on March 24, 2005.

The “agreement”, Barrow explained, was signed between IMMARBE’s parent company, Belize International Services Limited (BISL) and the then Prime Minister, Hon. Said Musa and Attorney General Francis Fonseca.

The document extended the agreement with BISL for another 10 years.

Barrow said that secret agreement recognized and validated a renewal option, which the Legal Advisor to the Minister of Finance, Mr. Gian Ghandi, had described as invalid.

“It purported to extend the life of the agreement for another 7 years, up to 11 June 2020 for a consideration of US $1.5 million.

Barrow said Ghandi wrote to BISL on June 9, 2003, advising the company that, after “careful consideration of the matter” (of renewal of the contract for ten years), the government has come to the conclusion that there is a fundamental change of circumstances since the Agreement was singed in 1993 and that this affects the continued validity of the Agreement.”

Barrow said that it is obvious that Ghandi’s advice was unilaterally ignored.

“Nobody was aware of the agreement that Musa and Fonseca signed,” Barrow said. “[It] was never brought to the Cabinet.”

He explained that his administration checked to see if there was any copy of the agreement anywhere in any file in Belmopan, but found nothing.

Barrow said the agreement was contrary to several laws of Belize, including the Finance and Audit Act, the Financial Orders, the Stores Order, and that the executive did not have the authority to enter into the agreement.

“[The agreement] is of no validity, therefore, the government has moved to assume control on a completely legal basis,” Barrow said.

The take over also affected the International Business Companies Registry, which registers offshore companies.

BISL’s response

Wednesday’s press conference succeeded a terse government release on Monday, which said: “The Government will assume control of the two Registries with effect from tomorrow, 11 June 2013.”

On the same day the government took over the registries, BISL issued its own press release, expressing its “surprise, disappointment and indignation at the Government of Belize’s unilateral decision.”

The BISL release added it has created a thriving offshore and shipping service that is beneficial to the government and people of Belize. And that its contract with the government of Belize is legal and enforceable.

It described the takeover as a “flagrant breach of contract” that will now expose the government to another round of expensive litigation.

“The Government will become liable to BISL for an amount estimated to be in excess of 60 million United States dollars in damages with obvious implications for the recently concluded Super-bond negotiations,” the release said.

Musa’s reaction

Former Prime Minister Said Musa also chimed in on the matter and told The Reporter Thursday that Barrow’s assertion that he [Musa] signed a secret  agreement with IBC is “a pack of lies.”

He said before he or Fonseca signed the agreement, it had been cleared by the ministry of finance, and  the solicitor general.

He said either Barrow has been fooled by someone or he is trying to deliberately mislead the nation.

Musa said that he questions the prime minister’s statement that he had no authority to exempt IBC from paying taxes.

“There are precedents in the courts. The executive does have authority to grant exemptions, and indeed there is case law in Belize. It is neither a secret agreement nor is it an unauthorized agreement,” said Musa.

“What we are dealing with here is a breach of contract,” Musa explained.

Musa labelled the entire matter as another attempt to create a whole round of litigation to benefit UDP lawyers.

He recalled that the EU has threatened to blacklist Belize during his administration, but you find away to work around it, to satisfy them.

“What is very disturbing is that people will start withdrawing from the offshore business in Belize. They will start pulling out their money, because the government is sending the wrong signal,” Musa explained.

He went on to describe the Barrow administration as a government “in crisis.”

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