Boating businesses here and abroad are crying foul over government plans to overhaul the rules for the marine industry in Virgin Islands waters.
Three bills introduced recently in the House of Assembly seek to amend various regulations in the commercial recreational vessel sector, including tightening licensing requirements and increasing fees by as much as 6,000 percent.
Premier Natalio “Sowande” Wheatley and other VI leaders say the bills are designed to modernise outdated legislation governing an industry that has expanded and changed dramatically in recent decades.
But many VI stakeholders say the proposed reforms would seriously hinder local businesses, and the marine industry in St. Thomas has raised such an outcry that the United States VI is threatening tariffs and other measures in retaliation.
Three laws
The proposed laws in question, which the HOA could debate and pass as early as today, are the Customs Management and Duties (Amendment) Bill, 2024; the Commercial Recreational Vessels Licensing (Amendment) Bill, 2024; and the Cruising and Home Port Permit (Amendment) Bill, 2024.
After the bills were Gazetted on Jan. 16, the Marine Association of the BVI — a non-profit organisation that claims 60-plus members employing more than 2,500 people in the territory — sent a strongly worded letter to HOA members.
In the 10-page letter, which was leaked to the Beacon, the association agreed that reforms are needed, but it criticised many of the provisions in two of the proposed laws and alleged that the government did not sufficiently consult the industry before moving forward.
“The majority of industry stakeholders consulted thus far believe that these legislative amendments are generally counteractive to the good of the BVI, its economy, and its marine industry,” the letter stated.
Though the association voiced support for some provisions in the bills, it derided others as confusing, “unnecessarily punitive,” ill-conceived or unclear.
The letter, for instance, criticised the inclusion of an “unbearably onerous” annual security clearance requirement and corresponding fee for all vessel crewmembers. Another complaint claimed that a proposed new categorisation system left unanswered questions about how vessels would be charged fees.
The association also recommended various alternative approaches, calling on government to lower administrative costs, improve enforcement efficiency, strengthen the territory’s “competitive standing both regionally and internationally,” and implement “marginally higher fees in exchange for a streamlined regulatory structure,” among other measures.
USVI complaints
The proposals that drew the ire of the USVI marine industry came in the Commercial Vessels Licensing (Amendment) Bill, which would dramatically increase fees for USVI vessels that operate in this territory’s waters.
For example, the annual fee for “unrestricted” foreign vessels shorter than 115 feet would be $24,000 — a 2,900 percent increase from the $800 maximum annual fee in the existing 1992 law.
Foreign day charters would have to fork over a $12,500 annual fee — representing a 6,150 percent increase from the existing $200.
As word of the proposed increases spread last week, stakeholders in the USVI marine industry met in St. Thomas to discuss their concerns.
Among the speakers was Staci Smith, the director of the VI Professional Charter Association, a USVI-based organisation that called the meeting, according to The St. John Source.
“If the BVI gets the new regulations passed, that is going to be an extraordinary expense for the term charters and for the day charters to take on, which could force term charters to have to be based in the BVI,” Ms. Smith reportedly said during the Feb. 18 meeting.
Tariff threat
The day after the meeting, USVI Governor Albert Bryan Jr. wrote to USVI Senate President Milton Potter proposing two measures to retaliate against the fee increases: imposing a tariff of 25 percent or more on goods imported into the USVI from this territory; and introducing an entry and exit fee for people travelling to or from this territory who are not USVI residents.
Last Thursday, VI Communications and Works Minister Kye Rymer, who at the time was acting as premier, issued a response to Mr. Bryan’s letter.
“We reaffirm our government’s commitment to maintaining the strong familial and economic ties that bind the VI and USVI,” Mr. Rymer said in a statement. “These ties are rooted in mutual respect, shared history and a spirit of collaboration. We are dedicated to addressing this matter through open communication and good governance to ensure that the interests of our people and businesses are protected.”
Local boat fees
The Commercial Vessels Licensing amendment would also increase fees for commercial vessels based in the VI, but not nearly as dramatically as for foreign ones.
For instance, the annual fee for a VI-based boat under 40 feet would double from $200 to $400, and the annual fee for VI-based vessels between 40 and 115 feet that offer day charters would quadruple from $200 to $800.
The Marine Association of the BVI did not target these hikes in its letter to HOA members, but it did take issue with how the law would categorise vessels.
The proposed amendment, the organisation claimed, is “unclear as to whether a vessel which falls into multiple categories will be charged multiple fees, the higher of the two fees, or if it is possible to operate in two categories.”
The premier, who has described the reforms as a cornerstone of his government’s legislative agenda for 2025, told the Beacon on Tuesday that he plans to make a statement about the topic tomorrow.
The HOA is scheduled to meet today, and the three proposed amendments are on the agenda after a series of financial services-related bills.
British Caribbean News