Update: Financial supervision should remain in place

THE HAGUE - Financial supervision should be continued for Curaçao and St. Maarten, the Financial Supervision Evaluation Committee advised in a report that Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops released on Wednesday.

“The Evaluation Committee has found that St. Maarten and Curaçao, based on the information of the three consecutive budget years of 2015 up to and including 2017, have not complied with the norms of the Kingdom Law Financial Supervision RFT,” Knops stated in the letter that he sent to the Second Chamber of the Dutch Parliament that accompanied the report of the Evaluation Committee.

Financial supervision was introduced when Curaçao and St. Maarten attained country status in 2010.

“Based on this, the Evaluation Committee concluded that the financial supervision based on the RFT for both countries has to continue and that it is not justified that one or more obligations of the RFT are eliminated,” Knops stated.

The committee presented five recommendations to the countries to make progress in light of the next evaluation. These recommendations have to do with improving financial management and enhancing the working relationship with the Committee for Financial Supervision CFT.

In the case of St. Maarten, the Committee found that the 2015 budget did not comply with the RFT norms and that there was too little progress in the area of financial management in 2015. In that year, the Kingdom Council of Ministers gave St. Maarten an instruction to get its finances and budget in order, the Committee stated in its report.

The Committee concluded that the budget balance of Country St. Maarten deteriorated in the course of in 2016 even though initially the 2016 budget complied with the RFT norms, despite the financial risks. The execution of the 2016 budget did not comply with the RFT norms.

St. Maarten’s 2017 budget complied with the RFT norms and the revenues surpass the anticipated calculations. As a result of the deteriorated finances in the aftermath of Hurricane Irma, the Kingdom Council of Ministers decided that St. Maarten was allowed to deviate from the RFT norms in the budgetary years 2017 and 2018.

“This doesn’t change the finding of the Evaluation Committee, as deviation from the RFT norms doesn’t mean that financial supervision can be lifted,” the Committee stated in its report.   

The Committee approached the governments of St. Maarten and Curaçao before rendering its advice. The draft advice was sent to both governments in November last year. Both countries responded and these responses were included in the report. Neither of the two countries had any objections in principle to one or more parts of the draft advice.

Knops stated in his letter that based on the Committee’s advice, the Kingdom Council of Ministers will take a decision on the continuation, restriction or lifting of the financial supervision for Curaçao and St. Maarten. The decision of the Kingdom Government will be published in the National Gazette.

 

The previous and first Evaluation Committee, which analysed the years 2010 up to and including 2014, advised in 2015 to continue the financial supervision for the two countries. The Kingdom Government stuck to this advice.




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