DUTCH CARIBBEAN: An Introduction

2023 THE DUTCH CARIBBEAN: An introduction  

Country Overview 

Since the constitutional reforms of 2010, the Dutch Caribbean consists of Aruba, Curaçao and Sint Maarten, which, together with the Netherlands, are the constituent countries of the Kingdom of the Netherlands, as well as the public entities (comparable with municipalities) of Bonaire, Sint Eustatius and Saba (jointly referred to as the BES Islands), which are direct non-autonomous parts of the Netherlands. This structure provides for a diverse legal framework that, although based on the same basic principles within the Kingdom of the Netherlands, differs (sometimes significantly) between all countries/public entities of the Kingdom. In first instance, civil cases are handled by the Courts in First Instance on the various islands. The Common Court of Justice of Aruba, Curaçao and Sint Maarten and of Bonaire, Sint Eustatius and Saba is the appeal court for all Dutch Caribbean jurisdictions. Judgments of the Common Court of Justice are subject to appeal in cassation before the Supreme Court of the Netherlands in The Hague (the Netherlands). The system is independent and of good quality. Only attorneys-at-law admitted to the Common Court of Justice are allowed to practice in the Dutch Caribbean. They are allowed to practice in all Dutch Caribbean jurisdictions.

Economy  

The islands of the Dutch Caribbean are small island economies with a strong international orientation towards the United States, Europe (especially the Netherlands) and South America (particularly Colombia and Venezuela). The islands are self-sufficient in terms of the supply of energy and drinking water and are further developing towards a sustainable production of electricity by solar and wind. The economies are mainly driven by tourism, logistics, international financial services and activities in the oil and gas industry. Curaçao, Bonaire and Sint Eustatius have large oil and other fuel storage capacity available. The COVID-19 pandemic seriously impacted the tourism sector during the lockdown period. Since then, the tourism sector, especially the high end, has rapidly and completely recovered. Aruba, Curaçao, Sint Maarten and the Netherlands agreed on the submission of the proposed Kingdom Act Caribbean Organ for Reform and Development (COHO). The Kingdom Act forms the foundation for a new form of multiyear cooperation between the countries of the Kingdom. The Central Bank of Curaçao and Sint Maarten is moving ahead with the introduction of the Caribbean Guilder. The aim is to introduce this new currency in 2024.

Politics  

Aruba, Curaçao and Sint Maarten are constitutional parliamentary democracies. The BES Islands are public entities that have limited legislative powers (whereas these islands are governed from The Hague). These limited legislative powers are attributed to the respective island councils of Bonaire, Sint Eustatius and Saba. The island councils are elected by the inhabitants of each public entity. From a legal point of view, Aruba, Curaçao and Sint Maarten have the autonomy to institute their own legal framework, provided this complies with Charter for the Kingdom of the Netherlands (and also international obligations originating from treaties, etc). With regard to the BES Islands, legislation that applies in the Netherlands does not automatically apply there, unless otherwise specified. The Netherlands is authorised to introduce specific legislation for the BES Islands and consults the local government in order to make sure this legislation meets the specific requirements of the small island economies.

European context  

The Dutch Caribbean countries and public entities are not a part of the European Union, but are associated with the EU as Overseas Countries and Territories (OCT). Therefore, European directives and legislation do not apply there. This may change if countries or entities in the Dutch Caribbean would apply to be considered as Outermost Regions (OMR). As OCTs, the Dutch Caribbean countries and public entities may benefit from this ‘associated’ status based on the Lisbon Treaty, which results in, for example, entitlement to participation in development programmes and the availability of subsidies and unilateral European Union trade preferences.

Developments and opportunities  

The United Nations’ Sustainable Development Goals (SDG) provide a framework that has been adapted by the different Dutch Caribbean as associated member states. Through the Local2030 Islands Network, many independent islands, among which Aruba, Curaçao and Sint Maarten, have committed themselves to implement the SDGs and strive to achieve socio-economic resilience by accelerating the innovation capacity through a human-centred approach. This has resulted in many initiatives with a focus on environmental preservation and economic growth. In this respect, the Small Island Developing States, the so-called SIDS of the UN, is also relevant with regard to developments in various areas, such as climate change, the Exclusive Economic Zone and biodiversity.

Some recent developments that will have impact in the legal sphere are highlighted below.

Corporate law
Curaçao and Aruba have recently introduced a revised civil code on corporate law and corporate governance. The changes include, amongst others, the abolition of bearer shares, extension of the liability regime not only for directors but also for all supervisors, the requirement of private foundations to maintain a register of beneficiaries and extension of manners to issue and transfer shares. This may require local legal entities to amend their articles of association.

Corporate Governance
Major improvements in corporate governance are implemented in most countries in the Dutch Caribbean. In 2023 the Central Bank of Curaçao and Sint Maarten will issue an extensive new corporate governance code for all supervised financial institutions. The government of Aruba is implementing a completely new designed framework for the corporate governance of its SOEs. Sint Maarten is thoroughly overhauling its existing legislation in the field of corporate governance for its SOEs.

Competition
After implementation of competition law in Curaçao, Aruba is in the process of adopting a competition law. Pursuant to these laws, mergers and acquisition are subject to notification with the countries’ fair trade authorities, that also enforce cartel prohibitions and other forms of market abuse.

Environmental
Although the BES Islands are forerunners on environmental legislation in the Dutch Caribbean, the environmental concepts and norms are also applied on the other islands. This results in existing and future industrial facilities being obliged to take measures (and execute investments) to comply.

Mergers and acquisitions
Mergers and acquisitions have taken place mainly in the communications and utilities sector. The trend is realising economies of scale and a diminishing influence of (former) government shareholders.

Online gaming
Curaçao is modernising its gambling legislation, primarily focusing on online gaming operators. While draft legislation has not been published yet, the law is expected to bring legislation in line with international standards, and to provide with individual permits per operator, replacing the current practice of (private) licensing by a small number of (master) licence holders.

Spatial planning
As the density of economic operations increases and the population of the islands grows, governments of the islands are further developing and introducing spatial planning regulations that also have an effect for existing development possibilities.

Stock exchange
Local and international parties increasingly list securities (debt and equity) on the Dutch Caribbean Securities Exchange (DCSX) in Curaçao. DCSX operates under a well-functioning yet practical supervisory environment and has developed into a small, stable and profitable exchange over the last ten years. DCSX is ambitious to become the main securities exchange in the region.

Final considerations  

The small island economies of Aruba, Curaçao, Sint Maarten and the BES Islands provide diversified legal framework and opportunities, especially in the oil and gas industry and in the corporate restructuring of new and existing tourism-related ventures. The economic activity takes place in a setting where legal, political and social considerations and stakeholders are intertwined. This requires a good understanding of local circumstances, but can provide many opportunities for local and foreign investors.