Financial supervision for Bonaire, St. Eustatius and Saba will become more flexible in the future. A law proposal to facilitate this is currently in consultation and should be at the Second Chamber of the Dutch Parliament before the summer of 2023.
Dutch State Secretary of Home Affairs and Kingdom Relations Alexandra van Huffelen announced this in an update that she recently sent to the Second Chamber regarding the proposal to amend the FinBES, the financial supervision law for the Caribbean Netherlands. The FinBES not only regulates the financial function of the public entities Bonaire,
St. Eustatius and Saba, their fiscal authority and financial relations with the Dutch government, but it also regulates the financial supervision by the Committee for Financial Supervision CFT Bonaire, St. Eustatius and Saba, which resorts under the responsibility of the minister of Home Affairs and Kingdom Relations.
Financial supervision is a heavy standard element in the current FinBES, Van Huffelen explained. Financial supervision is not flexible and does not lead to less supervision when the public entities comply with their obligations. This especially counts for Saba, which has been largely complying with the financial supervision norms.
On the other hand, when the public entities don’t comply with the financial supervision obligations, it is complex to “scale up, because there is already a lot of supervision,” stated Van Huffelen.
“The effectiveness of the supervision can be increased by specifying the supervision. Therefore, this law proposal contains a proposal for a step model of financial supervision with a differentiation between a light, medium and heavy model,” she stated.
The decision which model will be applicable per public entity will be taken annually based on the adapted law and a financial supervision framework. “Bonaire, St. Eustatius and Saba are each in a different phase in having their finances in order,” stated Van Huffelen.
“Differentiation can be made between the islands by applying the different models of supervision and guidance. In this manner, the intensity/ weight of the supervision can move along with the state of the budget and the island’s financial management, and can be customised. In other words: the supervision model is applied where it is really necessary,” the state secretary noted.
In a case where the island complies with the regulations and agreements of the FinBES, financial supervision can be reduced to a level that is comparable to the situation for Dutch municipalities.
In such a scenario, the public entity will have more manoeuvring room to carry out its own responsibilities and the financial supervision will weigh less on the capacity of the island’s finance department. The system is based on mutual trust.
The Daily Herald.