Caribbean Investment Fund

• Author: Duke Pollard
• Profession: Sitting senior judge of the Caribbean Court of Justice (CCJ), the highest appellate municipal court of the Caribbean Community (CARICOM)
• Pages: 346-361

346 THE CARICOM SYSTEM

18

THE CARIBBEAN INVESTMENT FUND

One major constraint to equity financing of economic enterprises in the Caribbean

Community is the absence of financial institutions to provide venture capital for such

initiatives. The ICWI Group of Companies attempted to fill this void in 1993 by

persuading Caribbean States to conclude the Agreement Establishing the Caribbean

Investment Fund. Hesitancy on the part of prospective members of the Fund to provide

the necessary consents, approvals and immunities and the generally unfavourable

investment climate in the global economy at the material time, resulted in the first

(1993) Agreement concerning the Caribbean Investment Fund never being

operationalised. A supplemental Agreement to the original Agreement concluded in

1996 suffered a similar fate and it was not until 1998 that another Agreement Establishing

the Fund was concluded and vigorous efforts undertaken by the CARICOM Secretariat

to ensure that the necessary enabling legislation was passed. Consents and the required

privileges and immunities to be recognised and granted by Member States were

forthcoming in order to operationalise the Fund which was denominated in United

States dollars and capitalised in the amount of US$50,000,000.

The objectives of the Fund as set out in the Agreement are to invest in private

sector majority-owned and controlled companies and corporations located in

participating States and listed or committed to be listed on the Stock Exchanges of

participating states; to encourage and promote projects involving new ventures and

business expansion and plant expansion of existing ventures geared towards enhancing

exports or import substitution and/or increasing hard currency earnings, and/or increasing

the production of goods and services designed to stimulate economic growth in the

participating States in which the investment is made. The ICWI was tasked with

management of the Fund and participating Governments committed to providing various

concessions, privileges and immunities to the Fund. The Fund may carry on operations

in the territory of any participating State and possesses in each participating State full

juridical personality with capacity to contract and to acquire, hold and dispose of both

real and personal property whether by way of mortgage, charge, transfer or sale or

otherwise. No restrictions are to be placed on the transfer of shares within and outside

the participating States to residents and non-residents. Further, participating States

undertook to provide all approvals and consents to ensure restrictions would not be

applicable to any investment or subscription of the Fund; gold or any currency held by

the Fund; securities of whatever nature held by the Fund; any real or personal property

or certificates of title relating thereto.

The Caribbean Investment Fund 347

Participating States also undertook to ensure that no taxes, duties, levies or imposts

would be payable on subscriptions to, or investments in, or securities issued, by the

Fund; revenues, income dividends, interest or profits of whatever nature accruing to the

Fund; the proceeds of sale, transfer or other disposition of securities issued to the Fund

as a result of investing or funding of any project; profits, gains and capital gains and

income generated by the Fund and remittances on interest dividends, distributions or

other payments by the Fund.

These concessions and privileges, designed to encourage the mobilisation of venture

capital and put the Fund on a favourable financial footing, have a time limit of ten years

from the date of subscription to the second tranche of the Fund unless the participating

State concerned determines otherwise.

The performance of the Fund and its operations are monitored by an Advisory

Board consisting of seven members appointed by the participating States on an agreed

basis. The Fund is required to provide written quarterly reports to the Advisory Board

indicating the investments made to, or funding provided for projects and non-project

activities. The Fund enjoys in Participating States for a period of five years, exclusive

rights to invest and operate there as a CARICOM Regional Fund.

AGREEMENT CONCERNING

THE CARIBBEAN INVESTMENT FUND

This Agreement made on the ___________ day of August 1998 between the

Governments of the Member States and Associate Members of the Caribbean

Community which are signatories to the Agreement Establishing the Caribbean

Investment Fund (hereinafter called “the Signatory States”) and the ICWI Group Limited

of 24-48 Barbados Avenue, Kingston 5 in the Parish of St. Andrew, Jamaica (hereinafter

called “ICWI”),

WITNESSETH as follows:

WHEREAS:

The Parties to the Agreement Establishing the Caribbean Investment Fund

(hereinafter called “the Fund”) which entered into force on the 15th day of October 1993

(hereinafter called “the Original Agreement”) have made the commitments specified

in the Original Agreement which appears at Appendix 1 to this Agreement;

The Parties to the Original Agreement concluded a Supplemental Agreement which

entered into force on the 26th day of October 1996 (hereinafter called “the Supplemental

Agreement”) amending the Original Agreement and which Supplemental Agreement

appears at Appendix II to this Agreement;

The Signatory States of the Original Agreement recognise that their omission to

implement in a timely way the enabling legislation to accord the agreed concessions

and privileges to the Fund as required by the said Original Agreement and Supplemental

Agreement, coupled with unfavourable conditions in international capital markets,

adversely affected the ability of ICWI to mobilise the resources for the operation of the

Fund;