Published On: Tue, Sep 18th, 2018

No direct supervision on government entities

Dutch ParliamentTHE HAGUE - Supervision on government entities in Curaçao and St. Maarten based on the Kingdom Law on Financial Supervision is limited, but does exist in several forms, according to Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops.

He explained in a letter he sent to the Second Chamber of the Dutch Parliament last week Friday that direct supervision on the government entities, including government-owned companies in Curaçao and St. Maarten, based on the Kingdom Law on Financial Supervision was not possible.

However, government entities that are part of the collective sector are part of the financial supervision and the exercise by the Committee for Financial Supervision of Curaçao and St. Maarten CFT to scrutinise the countries’ budgets.

“Concretely, this means that the CFT checks to what extent government entities can present a risk of negatively affecting the budget. This takes place based on information about the government entities that the CFT receives via the country. In practice, it often happens that this information is not provided or is given in an untimely manner,” stated Knops.

The CFT requests the annual reports of the government entities in a standard procedure as part of the financial supervision law that regulates the obligation of the countries to supply information. Some government entities are sufficiently proactive and directly send their annual reports to the CFT.

The projected dividend revenues of the government entities also form part of the CFT CFT’s assessment of the countries’ budgets. Government entities with an important function in the local society can have large consequences for the budget.

Government may have to intervene to secure continued service to the community when a government entity runs into financial trouble. Such an intervention can result in non-compliance with the financial supervision law which requires the countries to have balanced budgets, Knops noted.

An additional way for the CFT to keep an eye on the government entities is the policy a government has regarding these entities. In this manner, government entities are also part of the financial supervision carried out by the CFT, he stated.

During a meeting in June this year, the Second Chamber, on the request of Member of Parliament (MP) André Bosman of the liberal democratic VVD party, had asked Knops for information regarding the status of government entities within the financial supervision framework.

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