CARICOM Enterprise Regime

• 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: 288-300

288 THE CARICOM SYSTEM

15

THE ESTABLISHMENT OF

A REGIME FOR CARICOM ENTERPRISES

The Agreement for the Establishment of a Regime for CARICOM Enterprises speaks

volumes about the inadequacies of the original Treaty of Chaguaramas in terms of

attracting investment from third States and among the Member States of CARICOM.

Article 35 of the 1973 Treaty did not accord a right of establishment by Member Countries

of the Community to nationals of other Member Countries. Member States simply

recognised that in allowing the establishment of economic enterprises by nationals of

other Member States, national treatment should be accorded to the latter if to withhold

such treatment benefits expected from the removal or absence of duties and qualitative

restrictions required by the Treaty could be frustrated. Similarly, the right to provide

services set out in Article 36 was no more than MFN treatment in respect of services

provided by nationals of Member States. Finally, Article 37 did not accord to nationals

of Member States the right to move capital, an essential requirement of intra-Community

investment in joint ventures and other forms of capital investment.

On the basis of the foregoing, private investors were reluctant to commit to

enterprises in the Community and Common Market. Consequently, there was a

conspicuous dearth of foreign direct investment in the period following the establishment

of the Community in 1973, which coincided with the quintupling of oil prices at that

time, by the petroleum exporting countries. Those were the heady days of the New

International Economic Order evidenced in the relevant resolutions of the United Nations

General Assembly. The reluctance of foreign direct investment to commit to developing

countries was aggravated by the doctrine of sovereignty over natural resources, construed

as legitimising the nationalisation of foreign investments in the natural resources sector.

In the Community, these fears found justification by reason of moves in Guyana to

nationalise the bauxite industry and in Jamaica to impose the bauxite levy in 1974.

Against this background, moves toward the establishment of a CARICOM Enterprise

Regime were initiated.

Consistent with the provisions of Article 44 of the original Treaty (1973) a

CARICOM Enterprise would be regionally owned and controlled within the meaning

of Article 1 and engaged in the production of goods of Common Market origin or in the

provision of services in the areas of tourism and the marketing of agricultural

commodities. To qualify for the designation of CARICOM Enterprise, an enterprise

must be approved by the competent authority and must be incorporated, registered,

managed and dissolved in accordance with the provisions of the Agreement.