On February 19th, following a town hall meeting held by the Virgin Islands Professional Charter Association (USVI) on February 18, Governor Albert Bryan Jr., announced a 25% tariff on the British Virgin Islands. The town hall meeting and Governor Bryan’s stance was in response to proposed regulation changes here in the British Virgin Islands regarding that increases in chartering permit fees for foreign-based vessels and restrictions on the definition of home-based vessels.
The governor wrote a letter to Senate President Milton Potter the next day requesting an emergency meeting of the Legislature to address urgent economic and policy considerations regarding the imposition of his administration’s proposed tariff and entry/exit fees.
“The increasing imbalance in cross-border trade and travel necessitates immediate legislative action to protect our local economy, ensure fair trade practices, and generate additional revenue for critical infrastructure and public services,” Governor Bryan in his February 19 letter.
However, Senator Kenneth Gittens, Senate Vice President, based on the Administration’s proposal to impose a tariff, requested a Legal Opinion from the Legislature’s Legal Council on the matter. The Legislature’s assistant legal counsel, Sharline Rogers, issued the legal opinion through the body’s chief legal counsel, Amos Carty Jr., on Tuesday in response to four questions posed Senator Gittens.
According to the legal opinion, the Governor does not have the authority to impose tariffs on goods or services coming into the Virgin Islands from the British Virgin Islands or any other foreign jurisdiction.
The Legal Opinion further stated that the U.S. Constitution bestowed the power to impose tariffs upon Congress. Congress, however, has delegated the power to lay tariffs to the U.S. President, a practice that began with the Reciprocal Trade Agreements Act of 1934 and continues to the present.
Senator Gittens also asked what legal precedents or provisions of Virgin Islands law, federal law, or other relevant regulations govern the imposition of tariffs or similar trade restrictions by the VI government.
According to the legal opinion, ‘the VI government does not have the authority to impose tariffs. The Revised Organic Act in Section 8(f)(1), however, bestows upon the Legislature the authority to impose a custom duty on any article imported into the Virgin Islands for consumption.’
The USVI Legislature emergency meeting is scheduled for today Wednesday February 26th.
While Acting Premier at the time, Honourable Kye Rymer announced that dialogue would happen between the two Territories, but showed no signs that the BVI Government would acquiesce to any demands made by the USVI Government.
While some residents feel that the hike in permit fees were too drastic, the USVI takes away $100 million in earnings from tours in British Virgin Islands waters, with some weekly tours advertised for some $88k. Other concerns with local Government are that the charters come into BVI waters already provisioned, and with their own employees.
The proposed amendments to the BVI's Commercial Recreational Vessels Licensing Act 1992 would raise overnight charter fees from US$400 to US$24,000, and day sail fees from US$200 to US$12,500
Charter permit fees have remained the same for roughly 30 years. The BVI Government has attempted over many years to regulate the fee and bring it in line with international standards, but has always had push back from the USVI Government.
We understand the Premier may be hosting a press conference on Friday February 28th to address this, and other matters.
We will bring you information as updates become available on this matter.