SURINAME: An Introduction to General Business Law

Suriname is an independent republic located in the north-eastern part of South America. It borders the Atlantic Ocean to the north, Brazil to the south, French Guiana to the east, and Guyana to the west. Suriname was claimed by the Dutch in 1816 and regained its independence on 25 November 1975.

The legal history of Suriname is closely related to its political development. The major periods are the colonial period, followed by the period of autonomy (or partial self-government), then independence (when a new legal order was instituted) and the military period that overturned the existing legal order, and – finally – the period of the return to parliamentary democracy. This all resulted in a mixed legal framework – the origins of which are partly domestic but also partly derived from the legal principles that governed the legal order of the Netherlands until 1991 (albeit interpreted and applied in a domestic context).

The administration of justice in Suriname is provided for by three cantonal courts and one appellate court. All courts have their seat in the capital, Paramaribo, but roving judges from Paramaribo’s cantonal courts also hold sessions in other districts. The appointment of judges is for life (ie, until the age of retirement). All judges are members of the Court of Justice. The basis for the appointment of judges is enshrined in the Constitution.

Economy  

Suriname is a small, natural-resource rich country with a population of approximately 600,000. The economy is driven by its abundant natural resources. Mining accounts for nearly half of public sector revenue and gold represents about 80% of total exports. This makes the Suriname economy vulnerable to external shocks.

From 2015, government revenue from mining fell sharply and foreign reserves were drained. In 2020, exacerbated by the COVID-19 pandemic, this led to a severe fiscal and balance-of-payments crisis – as well as drastic devaluations of the Suriname currency and ever-increasing shortage of foreign currency. In December 2021, the government entered into a 36-month arrangement with the International Monetary Fund. This Extended Fund Facility for Suriname amounted to the equivalent of USD688 million and aims to restore fiscal sustainability and bring public debt to sustainable levels.

Foreign Exchange Restrictions 

The economic situation and the shortage of foreign exchange also resulted in foreign exchange restrictions imposed by the government. More specifically, the government imposed upon Suriname-resident exporters a repatriation obligation of 100% of their foreign currency export revenues – as well as an obligation to exchange 30% thereof in Suriname currency through one of the resident foreign exchange commercial banks.

CARICOM Single Market and Economy 

Suriname is a member state of the CARICOM Single Market and Economy (CSME), which was created by the Revised Treaty of Chaguaramas in 2006 to establish a common market – comprising freedoms such as the free movement of goods, persons, capital and services, as well as the right of establishment – and co-ordinate common policy in designated domains. The other member states are all English-speaking West Indian islands and mainland territories of the Caribbean Basin area such as Trinidad and Tobago, Jamaica, Barbados, Saint Lucia, and Guyana. CARICOM residents do enjoy a corresponding favoured status over sources of foreign investment.

Company Law 

Suriname company law has recently been modernised. This was undertaken with the intention of abolishing bearer shares, simplifying and cutting start-up costs for the creation of companies, and introducing the one-tier board system as an alternative to the two-tier board system of governance.

Competition 

There is, to date, no competition law in force in Suriname and there are currently no domestic agencies reviewing transactions for competition-related concerns. There is a draft competition law in circulation, pending review by the government. The CARICOM Competition Commission is based in Suriname, where it monitors potential anti-competitive practices among enterprises operating within the CSME.

Environmental Law 

The Environmental Framework Law has recently been passed. This law deals with the protection and sustainable management of the environment in Suriname, and the implementation and carrying into effect of obligations deriving from Suriname’s membership of international treaties, conventions and agreements (such as the UN Framework Convention on Climate Change, the UN Convention on Biological Diversity, the Paris Agreement, the Stockholm Convention on Persistent Organic Pollutants and the Rotterdam Convention on Pesticides and Industrial Chemicals). At the same time, this law establishes the authority and powers for the investigation, prosecution and trial of offences prescribed as environmental offences.

Oil and Gas 

The Guyana–Suriname Basin – ie, the offshore economic zone north of the Atlantic coast of Guyana and Suriname – has been identified by the US Geological Survey as having significant potential recoverable petroleum and gas reserves. In the past few years, several Production Sharing Agreements have been signed with international petroleum companies to do the exploration of oil and gas in offshore Suriname.

Recently, a joint venture between Apache Corporate (APA) and TotalEnergies announced the discovery of several viable wells, totalling a reserve of about 700 million barrels of petroleum. Although a final investment decision is yet to be made, the drilling of appraisal wells is ongoing and even now already generates relevant economic development for Suriname. In anticipation of an affirmative final investment decision, substantial preparations are being made to educate the local workforce in order to capitalise on the attracted economic development.

Carbon Credits 

Suriname is about 90% covered by forest and has a carbon-negative economy. Any global warming gases it does produce are offset by natural resources that absorb those gases. Suriname has outlined updated plans (Nationally Determined Contributions) under the Paris Climate Agreement to fight climate change in the hope of ensuring that any future increase in the temperature of the planet does not exceed 1.5 degrees Celsius above pre-industrial levels. In order to finance these plans, Suriname enters the potentially lucrative carbon credit exchange market as a promising avenue to source international funding.