PHILIPSBURG–In a ruling which may have big consequences for the banking and financial sectors, the Court of First Instance decided on Tuesday that Windward Islands Bank (WIB) NV is no longer allowed to charge a one-percent licence fee over international transactions on behalf of Wise Travel Bureau NV, the holding company of Travel Planners travel agency.
The Court also ordered them to reimburse US $216,074 to Travel Planners, with interest. The Bank is no longer allowed to charge the travel agency with any licence fees, against payment of $1,000 in case of non-compliance, to a maximum of $100,000. WIB also has to pay the legal fees attached to the proceedings, which were set at NAf. 15,464.
As part of its services to Travel Planners, WIB facilitates money transfers from the agency’s bank account to International Air Transport Association (IATA), which does not have a branch in St. Maarten.
These concern payments for airplane tickets for Travel Planners’ clients. At the end of every week, the agency pays these amounts to IATA, which ensures that the respective amounts are being paid out to the different airlines.
WIB is a foreign exchange bank, authorised by the Central Bank of Curaçao and St. Maarten, and is obligated to pay a one-percent licence fee to the Central Bank on every foreign exchange transaction. WIB is passing these amounts on to its customers who make international payments.
Until July 2012, the bank considered Travel Planners’ payments to IATA as domestic payments for which the one-percent fee was not charged. This changed in 2012 after the Central Bank indicated that it considered the payments to IATA payments to a foreign entity.
During a meeting on July 18, 2012, for which all IATA-travel agents in St. Maarten were invited, WIB said it rejected all complaints about charging the agents with the licence fee because the fee was imposed by the Central Bank.
By letter of June 15, 2015, Travel Planners’ attorney summoned the bank to reimburse his client’s fee payments of US $122.351.
“Since the reclassification of IATA’s bank account in July 2012, the [Bank – Ed.] has been charging a fee of one per cent to my client on every amount that was transferred to IATA’s account. My client is of the opinion that there is no legal ground for this charge, in the law, nor in the agreement or in the applicable general conditions of the [Bank – Ed.],” it was stated in the letter.
As the WIB did not heed these calls, the travel agency called upon the Court to order the bank to pay out $216.074 in fee charges, and pay $23,489 in expenses, with interest.
It also called upon the Court to forbid the bank to charge any licence fees against payment of $5,000 for every violation, to a maximum of $500,000.
According to WIB, the Judge should reject the claims as it concerns itself to be merely an intermediate between its clients and the Central Bank, which imposes the fee.
The Court rejected all the bank’s arguments, and awarded reimbursement and payment of damages.
WIB may, however, file for appeal, which would mean that payment will be suspended.
The Judge said it would not be “helpful” if the bank would be confronted with restitutions to Travel Planners, and possible other parties, during the appeal procedures.
In case WIB would win on appeal, this would mean that it would have to claim these amounts back again.
The Judge said he had considered that St. Maarten’s economy was severely damaged by Hurricane Irma. The Court wants to prevent that execution of the verdict, and the precedent created by it, would hamper recovery of the economy.
Source: The Daily Herald https://www.thedailyherald.sx/islands/71394-court-strikes-licence-fee-for-travel-planners