Opposition Leader Ralph Gonsalves has delivered a stark warning to St Vincent’s government, declaring that the Company Law reforms bill, which was passed last Thursday, will trigger intense international scrutiny, threaten the country’s financial reputation, and risk landing St. Vincent and the Grenadines back on global financial blacklists.
During a heated parliamentary debate over the Companies Amendment Bill, Gonsalves urged the administration of Prime Minister Godwin Friday to withdraw the legislation immediately. He argued that the bill systematically rolls back crucial anti-money laundering and corporate transparency controls, directly undermining St. Vincent’s standing with global financial watchdogs.
At the heart of Gonsalves’ argument is the January 2024 Mutual Evaluation Report issued by the Caribbean Financial Action Task Force (CFATF), the regional body aligned with the global Financial Action Task Force (FATF).
Gonsalves pointed out that the CFATF evaluation already rates St. Vincent and the Grenadines as only “partially compliant” regarding Recommendation 24, which governs the transparency and beneficial ownership of legal persons. According to the report, the Commercial and Intellectual Property Office (CIPO) currently collects ownership information on paper but fails to verify or independently confirm who is actually behind registered corporate entities, other than basic listings of shareholders and directors.
“The FATF focuses on beneficial ownership because it prevents criminals, corrupt actors, and tax evaders from hiding illicit funds behind complex corporate structures or nominee setups,” Gonsalves explained.
Rather than addressing this documented vulnerability, Gonsalves charged that the government is moving in the exact opposite direction. By repealing Section 338E—the provision requiring registration for every corporate shareholder in a land-owning external company’s ownership chain—the bill actively removes indirect beneficial owners from the registration net.
“With this bill, a company holding land through a chain of affiliated external companies will no longer be compelled to register,” Gonsalves warned, stating that this rollback will “doubly flag” the country and carry a severe “red flag” to international evaluators.
Gonsalves also raised concerns over the bill’s amnesty provisions under Clause 7, calling them “highly problematic” from an international compliance perspective.
According to the Opposition Leader, the six-month amnesty does not merely ease compliance timelines; it effectively suspends all of the statutory enforcement mechanisms the Registrar of Companies relies on to enforce beneficial ownership rules. During this six-month window, the bill suspends critical regulatory powers, including:
- The Registrar’s power to strike delinquent companies off the registry under Section 356(3) and Section 511A.
- The self-executing statutory asset charge secured against delinquent companies under Section 355(3)(A) and (B).
- Criminal prosecution capabilities under Section 194(3).
Gonsalves warned that shutting down these compliance mechanisms means unregistered and delinquent companies face virtually no consequences for half a year beyond a deeply discounted fee, leaving the jurisdiction highly vulnerable to regulatory abuse and international sanctions.
The Opposition Leader recalled the extensive, difficult work required to remove St. Vincent and the Grenadines from multiple international blacklists and grey-lists when his own administration first came to office in 2001. He pleaded with the current administration not to reverse those hard-won regulatory achievements through “arbitrary” and “illogical” fee rollbacks.
Gonsalves criticized the decision to slash non-registration penalties for foreign companies from $350 a day to approximately $50 USD ($135 EC) per month, capped at a maximum of $10,000. He argued that under these new parameters, a foreign shell company could operate completely unregistered for nearly 17 years before hitting the cap, creating a perverse incentive to bypass the standard $3,000 registration fee entirely.
“We are prepared to have a mature, evidence-based debate about the optimal fee, penalty, and enforcement structure for our corporate sector,” Gonsalves concluded. “But the way we are proceeding is not the way to deal with an important matter like altering the Companies Act.”
