Since last Tuesday, February 15, SIBA had caused advertisements on television and on the Nation stating that the proposed Trusts Bill 2011 could be downloaded from their website and that the public should comment on this bill by the 25th February 2011. Once again, the adverts direct that comments should be directed to the Ministry of Finance's policy and strategy division at email@example.com
While everyone was busy scrutinizing the proposed companies bill 2011, SIBA sneaked in the proposed Trusts Bill 2011 sometime late on Friday, February 18. This Trusts Bill 2011 is incompatible with the laws of Seychelles. It ignores established laws on legal and beneficial ownership of Seychelles properties. It allows property in Seychelles to be held in trust and although it seeks to prevent immovable property (land) from being held on trust, their are obvious loopholes allowing for Seychelles immovable property to be held on trust.
Potentially, it can lead to schemes being devised so that non-Seychellois may become beneficial owners of Seychelles immovable property without having to go through the sanction application process (non-Seychellois must obtain Government permission to own land in Seychelles) and pay sanction application fees (1.5% the market value of the immovable property) and sanction fees (up to 30% the market value of the immovable property), it will this deprive the Government of much needed income. Already it is well known that there are land transactions that flout our immovable property foreign ownership laws.
This bill, if passed, would also create uncertainty when it comes to purchasing land in Seychelles and may increase the risk involved where a foreigner seeks to purchase property from one of the numerous integrated resort schemes, the risk would be particularly higher for second purchasers. It would also increase risk with regards to the purchase and/or pledge of shares, something that will concern multi-national transactions involving IBC's.
The introduction of the constructive trust concept to local property will also have wide ranging negative consequences and could lead to property disputes emanating amongst co-habitants.
Once again, SIBA wishes to push forward with legislation that will only cause more problems instead of solving any. This Trusts Bill and the Companies Bill have not been drafted by the Government's drafting division in the Attorney General's Chambers and the Attorney General's Chambers has had no input into it.
This Trusts Bill goes against the very fabric of our civil law. Once again its proponents appear to be unappreciative of Seychelles civil law. And just like with the proposed Companies Bill, there has been no consultations with the public on the policies behind this Trusts Bill.
The word from the grapevine is that those in very high places are getting fed up with the nonsense from the people of SIBA and its "friends". Those with the real power are realizing that SIBA's only success has been the incorporation of IBC's (essentially clerical work), introduced in the mid-90's in conjunction with SIBA's inception. Since then, SIBA, despite being well funded, has failed miserably to successfully break into any other industry. International Trusts and Foundations have not proven to be as successful as the IBC and SIBA has failed completely in launching the mutual funds and securities industry. Employment opportunities for our legal and business graduates are being stifled. Many are stating that the success with IBC's was even more of a 'lazare' than Lazare Picault's landing on Mahe.
We need individuals in SIBA who know our legal environment, who appreciate its subtleties, who can garner the respect of our legal profession and most importantly, who can actually do something more than just incorporating IBC's. With the real right people in SIBA, Seychelles could go far as a financial centre. We don't need to wait for oil to be prosperous.
The Robing Room is the official blog of the Seychelles Legal Environment Website (sites.google.com/site/theseychelleslegalenvironment), the only website about the Seychelles Legal Environment that is constantly updated.