Law Review 2023

Radical Investments Ltd. v. Good Vibrations Entertainment LLC (2:22-cv-02752)

This case was filed on September 17, 2021 in the Florida Courts and then transferred to California. It concerns the purchase of vaccines for Barbados by Radical from Good Vibes for $12 000 000. Some of the defendants never responded to the claim, and others have been removed as defendants. One notable development has been the return to Radical, money held in escrow by the Stein Law Group in the sum of $5,474,830.00.

On June 7, 2023 the Defendants Charles Z. Stein, Esq. and Davidovich Stein Law Group, had dismissed with prejudice all claims against them. No doubt during 2024 Radical would wish to obtain default judgment. Whether Good Vibes or Alex Moore can pay is another matter.

The Results of the OECD Base Erosion & Profit Shifting Initiative

Though not a body that can impose laws on states the OECD has proposed 15 action items which Barbados has been implementing. One such action includes a Pillar 1 and Pillar 2 solution. Pillar 1 in its first iteration seeks to target the biggest multinationals which will be required to pay taxes in the jurisdictions which consume their goods and services. Prior to this a Permanent Establishment was required for income taxation.

So, Microsoft selling product into Barbados would not need a physical presence, would have no PE and would not be subject to tax. Provided that the multinational generates more than $560, 000 Barbados might be able to assert tax jurisdiction. Whether the online taxation under the VAT Act will continue has to be addressed.

Then Pillar 2 introduces an optional 15% minimum tax. In the Prime Ministerial statement of November 7, 2023 the PM proposed setting the rate at 9% for most entities. Where there is an effective tax rate of below 15% actions can be taken by other countries to benefit from the tax foregone. It is expected that within the first quarter of 2024 the legislation ushering in the OECD proposals will be debated in Parliament.

These are the biggest international tax changes in decades.

Thomas v. the AG and DPP Claim No. CV2022-04567

Then the rights of Citizens was highlighted. In this Trinidadian case a businessman, Brent Thomas was arrested by Barbados police and detained until he could be collected and transported to Trinidad & Tobago by officials of that country.

Concerning the abduction Rampersad J. said: “Words cannot express the abhorrence that the court feels towards this unlawful act in a supposed civilized society governed by a Constitution in which the freedoms of the citizens are supposed to be protected. Constitutional relief was granted including damages, for the breach of the claimants’ constitutional rights.

Abdul Aziz v. Republic Bank (Barbados) Ltd. CIV677 of 2020

Then there was some good news for consumers. It certainly had come to be expected that once clients defaulted in paying their mortgages the Bank had no continuing duty of care to them. In this decision the Court found for the Claimant who was claiming compensation for breach of a debt compromise agreement.

The Court referred to the duty which the Bank had to act in good faith when seeking to exercise its power of sale under the Property Act. The Court found that there was bad faith in reneging on the debt compromise and proceeding with the sale when the matter was still before the Courts.

ANOTHER EFFORT TO COMPLY

In 2020, Barbados ratified the Multilateral Convention to implement OECD minimum standards for Barbados double taxation agreements (DTAs). Since August 12, 2021 Barbados had also agreed to the principles set out in the OECD Pillar 1 and Pillar 2 solution to prevent Base Erosion and Profit Shifting (BEPS). Most recently on November 7, 2023 the Government of Barbados announced a number of tax reforms in order to ensure compliance with Action 1 of the BEPS Project, that is the digitilisation of the economy.

These developments must be viewed within the context of the 1998 publication Harmful Tax Competition, An Emerging Global Issue. Following that OECD publication was an aggressive process of “blacklisting” countries including many within CARICOM. The issue for the OECD then as it is now is geographically mobile services. Barbados and other small states responded with the creation of the International Tax and Investment Organisation (ITIO) which along with Society of Trusts and Estate Practitioners (STEP) published in 2001 Towards A Level Playing Field demanding respect for sovereignty and equality of treatment. The OECD invited countries to join the Harmful Tax Competition Forum which monitors low tax jurisdictions like Barbados. The Base Erosion and Profit Shifting Project (BEPS) saw and expansion of OECD efforts as the concerns were no longer just Caribbean and other small states but tech companies utilizing countries like Ireland.

So BEPS produced a two-pillar solution. Pillar 1 seeks to transform the international tax landscape, basing the jurisdiction to tax, not on the existence of permanent establishments but the sale of goods and services into the taxing jurisdiction. The rules require multinationals to have turn over of 20 billion euros and a profit margin above 10%. 25% of profits above a 10 percent margin may be taxed. This is known as amount A. Amount B then seeks to allow for a simpler way (other than transfer pricing rules) of taxing marketing and distribution service activities. The target here was no more than 100 tech companies. And there is a potential for Barbados to tax Multinationals which derive at least 1 million Euros from Barbados.

Pillar 2 then proposes a minimum tax rate of 15%. The rules apply to companies with revenues of over 750 million euros. If countries have an effective tax rate of below 15% (like Barbados) then there are rules which can be applied. First there is a “Domestic Minimum Tax” which can be used to tax companies in jurisdictions with a minimum effective tax rate below 15%. Second the “Income Inclusion Rule” which allows for jurisdictions which are parties to the rules to examine the effective tax rate in the low tax jurisdiction, determine the difference between the effective rate and the 15% rate and collect tax based on that tax rate difference in the parent jurisdiction. Then there is the “Undertaxed Profits Rule”, which allows a country to increase taxes on a company if another related entity in a different jurisdiction is being taxed below the 15% effective rate. The fourth Pillar Two rule is the “Subject to Tax Rule,” meant to be used in a tax treaty framework to give countries the ability to tax payments that might otherwise only face a low rate of tax. The tax rate for this rule is set at 9%.

Over several years Barbados has sought to address the issues raised by the OECD. The convergence of the tax rates on substantially all entities to a single maximum rate of 5.5% was one of the first efforts. There was also the implementation of a digital tax through amendment to the Value Added Tax Act (The Amazon Tax). Then there was the implementation of the Companies Economic Substance Act in 2018. Barbados’s response to BEPS Action 1 has been to propose (i) imposition of a tax rate of 9% for substantially all companies, which is below the optional 15%. (ii) approved small businesses will be taxed at 5.5% (iii) Multinational Enterprises which do not qualify as one of the Pillar 1 companies will remain under the current regime. (iv) Introduction of a top up tax for the companies which fall within the scope of Pillar 1. (v) Two qualified tax credits were also announced (a) A Qualified Jobs Credit and (b) Research and Development Credit. In addition, for companies which qualify monthly prepayments are now required.

Ad yet it might not be all smooth sailing. The USA has not had the congressional will to pass legislation in support of the proposals. The new international tax rules are still thought to benefit the wealthiest countries. There is still criticism that even though Pillar 1 seeks to focus on where goods are consumed it still only refers to residual profits. Despite these questions CARICOM member states in November 2022 agreed that the CARICOM DTA should be updated to ensure that it complies with OECD tax standards. CARICOM Member States also agreed to analyse the economic impact of the Two-Pillar Solution but nevertheless endorsed it. At the United Nations non-OECD countries still struggle with the notion that the OECD Agenda is set without many of the countries in the world sitting at the table. OECD members are still the wealthiest countries. There is now a proposal on the table that the dominance which the OECD has demonstrated over the last sixty years over international tax matters should come to an end. Barbados’ traditional view has been that limited member organisations like the OECD should not be allowed to set international standards.

Housing Every Barbadian vs. Old Mortgage Laws

The mortgage deed can be described as a long term, standard form contract where even though the consumer must pay a negotiation fee there is very little which can be negotiated. Quite often the attorney-at-law working for the financial institution also works for its client. One should add here that working for both parties is not seen as unethical according to the Legal Profession Act (Cap. 370A).

This potential conflict is meant to promote speed but perhaps does not ensure that consumers understand fully their mortgage obligations.

It is not easy for us to find statistics as to the number of Barbadians who lose their homes to mortgage default annually. Many of us have knowledge of Court Marshalls going to the homes of Barbadians in their middle or advanced years, removing their possessions and taking them to the dump.

Obviously the financial institutions wish to recoup their funds. These sums become bloated, however because of an aggressive application of penalties, interest and late fees which continue to accrue even after the financial institution has applied to the courts and has taken possession of the property.

After the property has been sold the consumer may also face the prospect of the financial institution continuing to pursue them for the balances owning.

The social impact of the tragedy of stripping Barbadians of their homes in their middle and advanced years has not been fully documented by academics in Barbados, if at all. What we do have however are studies on Non-Performing Loans in the Caribbean.

One such study is a November 2017 working paper of the International Monetary Fund. An important aspect of the study is the efforts made by financial institutions to deal with non-performing loans over a three year period from 2017. Efforts include (i) active follow up with clients to mitigate delinquency (ii) restructuring of loans (iii) aggressive approach to loan loss provisioning and write-offs and (iv) encouraging voluntary sales.

The study does not really consider whether the mortgage laws favour the financial institutions. Informal discussions suggest that it depends on the personality and attitude of the financial institution as to whether any of the relief measures which the study highlights are implemented.

Banks Must Act in Good Faith

Traditionally when banks reach the stage of exercising their power of sale, they have been quick to point out that they are not real estate agents and are under no obligation to get a “good price” for  property being sold. This case may very well mitigate that attitude, highlighting as it does the legal requirement for financial institutions to act in good faith and to be mindful of the interests of the owner of the property.

The Claimant in this case represented the estate of a couple who created a mortgage over  a small hotel. Sadly illness and ultimately death of firstly the husband and then the wife meant that their payments to the bank fell into arrears. As at August 31^st, 2020, the Estate was indebted to the bank in the sum of $894, 291.70 (loan principle $353, 168.31; interest, $449, 777.98 and fees $91, 355.40) . The bank by order of the Court had been granted the power to sell the property.

The Claimant representing the estate of the deceased entered into a debt compromise agreement with the bank in the sum of $500,000.00. If the Claimant could raise the money the debt would be satisfied with that sum by an agreed date. There was an extension to the deadline. He then found a buyer willing to buy  for  the sum of $1,200,000.00. The Defendant bank entered into an agreement for the sale of the property with the buyer who had been sourced by the Claimant on February 17^th, 2020. The bank delayed in completing the sale. The bank then withdrew the debt compromise offer on April 29^th, 2020. The Claimant sued for breach of contract in the sum of $700,000.00, the difference between the sale price and the debt compromise sum. The matter came on for determination before Justice Barry Carrington.

The learned trial judge examined provisions of the Barbados Property Act Cap. 236 and in particular Section 113 (1) which provides that a mortgagee (bank) in exercising its power of sale must act in good faith and have regard to the interests of the mortgagor owner.  The Court found that there was an unwillingness to complete the sale expeditiously even though the buyer was “ready and willing”, so that the Claimant might avail himself of the debt compromise.

Justice Carrington summarized what had occurred thus:

The debt compromise did not restrict the Claimant from finding a purchaser, and did not prevent him from procuring a price in that price point. If carried through the Claimant would have netted a “windfall” after the requisite deductions and I am convinced that that realization caused the bank to change its position ad deliberately prevented the occurence of the condition regarding the payment since only the bank could effect the sale.  In such cases equity must intervene to assist the mortgagors.

Thus the Court found that the bank had acted in bad faith, that the agreement for sale was signed before the withdrawal of the offer, the Defendant was bound by its terms and must complete the sale. Where the bank had entered into an agreement it could not then hinder the fulfillment of the agreement. After deducting the compromised sum of $500,000.00 plus reasonable expenses, the balance must be paid to the Claimant.

Justice Carrington also commented on the conduct of the Defendant who continued with the sale of the property even though it had joined issue with the Claimant and had submitted a counterclaim for the determination of the Court. The same was completed while the Court was still deliberating.

This case signals that the Courts are willing to rely upon principles such as “good faith” in the harsh reality of individuals having their property sold by financial institutions. They are also willing to exercise their equitable jurisdiction where justice demands it.

Claim No. CV667 of 2020 Lynette Eastmond of Eastmond & Co represented the Claimant.  CV 667 of 2020.

Defendant’s Answer to Plaintiff’s Claim

Radical Investments Ltd. (RIL) vs. Good Vibrations Entertainment LLC (GVE)

On September 17th, 2021 Radical investments Ltd. a St. Lucia company based in Barbados filed a law suit in the Florida, United States Courts against a company called Good Vibrations Entertainment LLC along with six other co-defendants. On January 28th, 2022 GVE filed an Answer, Counter-Complaint and Cross Claim in that same matter.

The GVE Answer to many of the several allegations contained in the Amended Complaint filed by RIL, is that “GVE/MOORE are without sufficient knowledge or information upon which to form a belief as to the truth of the allegations” or the allegations have been denied.

There are however a number of admissions, including that monies were paid into a paymaster and that monies were paid out on the instruction of RIL in connection with the acquisition of vaccines.

Very early in the Answer GVE alleges that RIL attempted to go directly to Serum and/or AstraZeneca when it discovered the price it was paying GVE was substantially more than it could obtain the vaccines for had it gone directly to the manufacturer or distributor.

With respect to the allegation of breach of contract GVE/Moore admitted that the Parties entered into an agreement by which vaccines would be procured. It was later discovered that RIL had accepted funds on behalf of another government.

It was alleged in the Answer that any vaccines which had to be provided to the respective governments would have to be done so directly since RIL was not an approved intermediary, wholesaler or distributor of vaccines.

The Answer admits that the vaccines have not been delivered but denies that such violated the agreement at the time it was repudiated by RIL.

There are a number of defences put forward by GVE including the fact that there was a Force Majeure Clause which applied to the delay in delivery and that the Plaintiff’s (RIL) cancellation of the contract constitutes the first material breach of the contract.

The Counter-Complaint alleges that after the execution of the agreement, and after the orders were placed, RIL discovered that AstraZeneca had agreed to provide dosing through COVAX in perpetuity at the rate of $3.00 and $4.00 per dose to low and middle income countries which would have included Barbados and RIL’s other client.

The Answer further alleges that RIL had made a bad investment and rather than making whatever price differential was between $12.00 per dose (including commission) and RIL’s agreement with the governments, that it had apparently overcharged, it sought to cancel the agreement and reap the benefit of the price differential between the roughly $3.00 to $4.00 per dose that GVE and its intermediaries would have paid and that which they had paid for the dosing, yielding an additional profit to RIL of an additional $6 to $7 million.

The Answer alleges that RIL interfered with GVE and its intermediaries in an effort not to help the Citizens of Barbados but in an effort to extract the profit for itself.

As a result RIL announced that it was cancelling the agreement and sought to go directly to the manufacturer AstraZeneca or through the Covax initiative to obtain the vaccine at the lower price.

GVE alleges that it had already incurred expenditure including for the transportation of the vaccines by the time the contract was repudiated.

GVE demands of the Court are:

1. Dismissal of the Amended Complaint

2. Judgment against RIL

3. Any amounts payable by GVE should also be payable by other joint defendants; and

4. A jury trial.

This is only a summary of the Answer of GVE and RIL would necessarily be given an opportunity to respond to GVE’s assertions

Nothing Fair About Trump’s Use of Electric Avenue

EDDY GRANT v. DONALD J. TRUMP(United States District Court, Southern District of New York: Edmond Grant et al v. Donald J. Trump et al)

The Plaintiffs in this case are Eddy Grant and the companies owning the rights to Electric Avenue. The Defendants are Donald J. Trump and his campaign.

This matter concerns the Defendants’ application for the dismissal of the Plaintiffs’ claim for copyright infringement.

The Plaintiffs (Eddy Grant, Greenheart Music Limited (Antigua), Greenheart Music Limited (UK) collectively are beneficial owners of the performing rights copyright in the recording. While Greenheart UK is the beneficial owner of the recording rights.

On August 12, 2020 Donald Trump tweeted a 55 second animated video from his twitter account. The animated video sought to portray Donald Trump in a positive light and Joe Biden in a negative light. Electric Avenue commences 15 seconds into the video and continues to the end of the video. The Defendants did not receive a licence or permission from Grant to use the song.

The Court pointed out that its objective was not to weigh the evidence as if at trial but to determine whether the application for dismissal of the complaint was sufficient.

The Defendants argued that the use of Electric Avenue was fair use. If proven this would be an absolute defence to Eddy Grant’s claim.

Fair Use seeks to strike a balance between the ability of artists to benefit from their own intellectual property and the rights of others to express such works or to express themselves by reference to such works.

The Court made reference to the fact that the USA Copyright Act provides for four factors to be taken into consideration where fair use is being argued.

Similar provisions are found at section 53 of the Barbados Copyright Act Cap. 300 of the Laws of Barbados.

The purpose and character of the use whether for commercial or non-profit educational purposes:

The Court examined the video and the song. The video did have a clip from a Joe Biden speech running at the same time as the song but the song itself was clear and easily recognisable. There was no transformation of the song to create a new work. The Court found that even though political the video was for commercial purposes as it was expected to at least attract donations. These findings favoured the Plaintiff.

The nature of the copyrighted work

Electric Avenue was found to be a creative piece of work which had been published as opposed to being factual content. Even though this factor is not critical to fair use it was nevertheless found to cut in favour of the Plaintiffs.

The amount and substantiality of the portion used in relation to the copyrighted work

The question is whether the quantity and value of the work is reasonable for the purposes of copying. The song played for 72.7% of the animation and was therefore a substantial part of the work. This point also favoured the Plaintiffs.

The effect of the use on the market and the value of the copyrighted work

The main question here was whether the uncompensated use of Grant’s work in the making of videos or otherwise would have a negative impact on Grant’s market for the licensing of his work. This was found to be the case.

The Defendants argued that Grant needed to show an intention to enter the market but the Court found that Grant had no such burden. The Court found that this also favoured the Plaintiffs. The Court concluded that the Donald Trump’s campaign did not prove fair use as a matter of law. It found that the song was not transformed and was not parodied but was copied wholesale without any editing. Trump’s Application to dismiss the claim was therefore denied.

The Court added that fair use could be raised again when the substantive matter of the infringement is brought to the Court when there was a better factual record.

Donald Trump Campaign Video

OECD Settles on 15% Minimum Tax Rate

Given the digital revolution business found it could be located just about anywhere, thus many companies found good homes in low tax jurisdictions. This became a major concern for developed countries and decades of work for the Organisation for Economic Cooperation and Development (OECD). Companies such as Google, Facebook, Twitter and Amazon have been on the radar for many years.

On July 1^st 2021 the OECD issued a statement which indicated that 136 countries including Barbados had agreed to a new two pillar approach to international taxation. Fundamentally the first pillar looked to re-allocate taxing rights to countries which were the largest consumers of the products of Multinational Enterprises (MNEs) and the second pillar looked to set a minimum tax rate of between 10% and 15%.

The OECD statement of October 8^th, 2021 sets that tax rate at 15% but for large companies with revenues above EUR 750 million (US$866 million).   

This underlines the point that the more influential countries like the USA are more concerned with ensuring that they can shift the largest amount of tax generated by the largest companies to their own jurisdiction as quickly as possible. Focusing on the largest companies and carving out the extractive industries (mainly developing countries) made the proposal easier and faster to sell.

As you may recall Barbados had taken several steps in direct response to OECD initiatives. It had repealed its international business legislation and set out new tax rates for all companies as follows:

• Taxable income not exceeding BBD $1,000,000 – 5.5%
• Taxable income exceeding BBD $1,000,000 but not exceeding BBD $20,000,000 – 3%
• Taxable income exceeding BBD $20,000,000 but not exceeding BBD $30,000,000 – 2.5%
• Taxable income exceeding BBD $30,000,000 – 1%

Barbados had in addition implemented an Online tax in keeping with OECD mandates. The new proposal recommends the removal of the online tax in exchange for the new taxing regime. We must wait to see if Barbados will remove this tax.   

Most of the companies in the world do not meet that US$866 million threshold thus there is still scope for companies to benefit from lower tax rates in countries like Barbados depending on the rules in their home jurisdiction. On the other hand, Barbados may also consider adjusting its tax rates upward to increase its takings from large domestic companies. Research and development is still considered to be a good reason for allowing concessionary tax rates.

It should be noted however that these are the broad strokes of political agreement. The precise terms of a multilateral agreement are still to be fashioned.

Barbados recently held an international business summit to explore its options. It is recommended that any new government policy will place “international business” within the context of long-term economic reforms so that Barbados will no longer simply react to the OECD.  One can become consumed by the intricacies of taxation. Our new policy must be driven first by a developmental mandate for Barbadians and only after that should there be a place or need for clever tax planning.

The Prevention of Corruption Bill

This is the second attempt which the Government will make to pass a piece of legislation dealing with corruption through the two Houses of the Barbados Parliament. One would not that the last attempt failed at the level of the Senate. The objectives of the Bill are to prevent, investigate and prosecute acts of corruption. The Bill also claims that any act done by a person outside Barbados which would be an offence if done within Barbados, is an offence for the purpose of the Bill. The Bill will also give the United Nations Convention on Corruption the force of law in Barbados.

WHAT IS A BRIBE?

The Bill seeks to prevent the bribery of individuals holding positions of influence in Barbados. Bribes include:

1. money and any gift, loan, fee, reward, bonus, commission, discount, rebate, valuable security or other property or interest in property of any description;

2. any status, honour, office, contract, employment or agreement to render services in any capacity;

3. any entry to an academic institution or course and any grant, scholarship, favourable academic results or other service, favour, right or privilege related to education;

4. any forbearance to demand any money or money’s worth or other valuable thing;

5. any avoidance of a loss, liability, penalty, forfeiture, punishment or other disadvantage or any protection from any disability or penalty apprehended or incurred from any action or proceedings of a civil, criminal or disciplinary nature, whether or not already instituted;

6. any discharge, liquidation, payment or release of any loan, obligation or other liability, whether in whole or in part;

7. any residential or hotel accommodation;

8. any exercise, or forbearance from the exercise, of any duty, power or right; any aid, vote, consent, influence or abstention from voting, whether actually or purportedly given or undertaken; 9. any other service, favour, right or privilege; and any offer, promise or undertaking, whether conditional or not.

One should note that this is not an exhaustive list.

Investigations

The police officer or other investigating officer is charged with the investigation of the possible offences under the Bill. They are given certain powers to construct and serve on those who are suspects disclosure orders to provide certain information. The information must not be unreasonably refused.

An investigative officer may apply to a Judge in chambers for a warrant to search premises and take information except for information which is considered privileged, such as attorney-client information. The information must be of substantial value or it must be in the public interest.

Unexplained Property

The tribunal is expressly given a mandate to take into account property which the accused or a related party holds which he can not explain.

Presumption

In cases where the accusation is one of bribing a public official (clause 4) or where there are tenders or contracts (clause 8) there is a rebuttable presumption that when an advantage is given or received it is meant to be an inducement.

Eliminating Certain Defences

It is not a defence that the corrupt act could not have taken place because (i) any of the parties involved did not have the power to deliver on the promise; (ii) it is customary in any profession, trade, vocation or calling.

CATEGORIES OF INDIVIDUAL TARGETTED

The legislation seeks to ensure that the following individuals are not the subjects of bribes:

1. public officers;

2. members, chief executive officers, managers, directors and employees of state-owned enterprises;

3. any other person who holds a legislative, executive, administrative or judicial office in the Government of Barbados, whether appointed or elected, permanent or temporary, paid or unpaid;

4. foreign public officials

5. officials of public international organisations

6. a person who directs or works in a private sector entity.

THE PENALTIES

1. A person who knowingly provides false information or makes a false allegation may be imprisoned for 3-5 years or may be fined between $50,000.00 or $150,000.00 depending on the severity of the allegation, or both.

2. Tipping off that an investigation will commence comes at a penalty of $250, 000.00 or 10 years imprisonment or both.

3. A person who fails to comply with a disclosure order to provide information or makes a false statement in connection with it is liable to a fine of $50,000.00 or 3 months imprisonment or both.

4. A person found guilty of an offence under the Bill would be disqualified from holding public office for ten years after the conviction.5. A person found guilty of bribery or trading in influence may be fined for a serious offence $1 500 000 or to imprisonment for 15 years or to both; and for a lesser offence, $500 000 or to imprisonment for 10 years or to both.

WHAT SEEMS TO BE MISSING

There is a provision in the Bill which allows the Minister to make regulations, however the question which immediately comes to mind is how would this legislation take effect if it were passed tomorrow. If Citizen K overhears a conversation so that it is within her knowledge that Individual Y was granted a contract on the basis that a percentage of the proceeds should go to Minister X’s charity, how does she proceed?

There is no clear anti-corruption mechanism in this Bill. There is no protection for the whistleblower, there is no special unit in the police force and there is no specific tribunal to hear these matters. Is this to be a part of the general justice system? If so, what chance is there of success? Or is there much more to come?

Barbados Caught in COVID-19 Scam

RADICAL INVESTMENTS LTD V. GOOD VIBRATIONS ENTERTAINMENT LLC (United States District Court Southern District of Florida West Palm Beach Division Case No.: 9:21cv81761: September 17, 2021)

Radical investments Ltd. a St. Lucia company based in Barbados has filed a law suit in the Florida, United States Courts against a company called Good Vibrations Entertainment LLC along with six other co-defendants. The 300, 000 citizens of Barbados are cited to be at the core of this case in the midst of the Corona Virus pandemic and efforts to secure vaccines.

INTERPOL has issued a global alert of organised groups attempting to defraud governments with fake offers to sell COVID-19 vaccines. The warning follows some 60 cases in 40 countries around the world where health ministries, governments, and hospitals have received offers for COVID-19 vaccines approved for distribution in their country.

The Plaintiff Radical Investments Ltd.’s Claim is that it was deceptively lured into an elaborate scam to advance the sum of 10.2 million U.S. dollars for one million non-existent doses of AstraZeneca vaccine.

The Claim alleges that on or around late March or early April, 2021, Mr. Mark Maloney, the principal of the Plaintiff, Radical Investments, was introduced by Cheryl Chamley, a Trinidadian national who resides in the United States and works in the PPE Sector to the principal of Good Vibes Mr. Alex Lee Moore.

Ms. Chamley and Mr. Maloney  are said to be business associates in the Claim. It is also asserted it the Claim that Radical had been  authorized by the Barbadian Government’s Ministry of Health and Wellness to procure vaccines on its behalf. The purchase price for the vaccines was to be USA $10.2 million.

As of the date of the filing of the Complaint, Radical Investments had been returned approximately $5.4 million of its initial deposit, leaving approximately $6.7 million in arrears. Radical Investment’s Claim is based on Civil Conspiracy, Deceptive and Unfair Trade Practices and Fraud and Negligence. The Claim alleges that Good Vibrations at no time possessed the ability, or the intent to procure let alone deliver the vaccines to Radical.

Radical had entered into a valid and enforceable purchase and sale agreement on April 16, 2021, for the sourcing and delivery of 1 million doses of AstraZeneca vaccines by Defendants in exchange for money payments by the Plaintiff. The vaccines were never delivered. By virtue of this material breach of the agreement Radical alleges that it has suffered substantial economic damages. Radical is further claiming that it is entitled to an award of compensatory damages, including consequential damages, together with interest and costs, and an injunction prohibiting the Defendants from continuing to engage in the alleged tortious conduct.

First published September 21, 2021

New Data Protection

 OVERVIEW

With the increased ease of storing and dissemination of data, the Parliament of Barbados proclaimed on March 26th, 2021. The legislation seeks to protect individuals in Barbados from negligent or reckless handling of their information by those who collect, hold or process that information. The Act is comprehensive and is worth special review if your collection of data is caught by the Act.

Entities are required to get the consent of the individual before taking their information. For children consent of a guardian is required. If there is any disclosure of information and the individual suffers any harm he or she is entitled to compensation.

Entities which are considered data controllers or processors are required to register. If they do not register they are liable to a fine of $10,000.00. If the entity is a public entity or a private entity which has a core business of processing data then it must appoint a Data Privacy Officer.

In order to protect the individual the legislation seeks to ensure that those who collect, hold or process information are properly regulated. The data controller/processor must put in place security measures commensurate with the risk associated with the data. The Entity must also develop binding corporate rules containing the entity’s data protection policy.

The legislation establishes a Data Protection Commissioner along with Staff. Their functions include (i) oversight of registrants (ii) taking investigative action where there is a suspicion that a breach has occurred (iii) penalizing entities which may be in breach. The largest penalty is $500,000.00 for failing to respect the individual’s right to have his personal information protected. There is also a Data Protection Tribunal which deals with any matters of litigation arising out of the Act such as appealing decisions of the Data Protection Commissioner.

BACKGROUND

Protection of data in Barbados has for many years occurred by default because of the difficulty in disseminating largely paper-based content. With the advances in information technology and the ease with which collected information can now be distributed the need for data protection legislation had become critical. The legislation comes against a backdrop of Government over decades now, working to improve its ability to collect and process data. Examples include the National Insurance Scheme, the Barbados Revenue Authority and the Customs and Excise Department.

Within the private sector we have seen the introduction of loyalty cards which collect a considerable amount of personal information about individual customers.

In addition businesses considered to be gate keepers for anti-money laundering purposes are required to collect more personal information from individuals than previously. These gatekeepers include financial institutions, lawyers, real estate agents and accountants.

Political parties have also developed databases which can identify individual’s political affiliations and how they are likely to vote during an election.

DATA PROTECTION PRIVILEGES

Section 4 of the Act identifies certain data protection privileges which those who collect, hold and process data must observe:

1. In relation to each individual, the data must be processed lawfully, fairly and in a transparent manner.
2. It must be collected for specific, explicit and legitimate purposes and must not be processed further than for the purposes identified.
3. The data can be adequate and relevant to the purpose and must be limited to that purpose.
4. The data must be accurate and kept up to date and if inaccurate must be deleted as soon as possible.
5. It should be kept in a form where the individual can be identified only for the purpose of processing the data.
6. Security measures must be utilized for the protection of the personal data including but not limited to accidental loss.
7. Individuals have a right to access information about processing their personal data. The data controller must advise the individual of the purpose for which the data is required.

SENSITIVE PERSONAL DATA

Entities must be even more careful in the collection and manipulation of information which is defined as sensitive personal data. This includes information concerning racial or ethnic origin; political opinions; religious beliefs or other beliefs of a similar nature; membership of a political body; membership of a trade union; genetic data; biometric data; sexual orientation or sexual life; financial record or position; criminal record; or proceedings for any offence committed or alleged to have been committed by him, the disposal of such proceedings or the sentence of any court of competent jurisdiction in such proceedings.

TO WHOM THE ACT APPLIES

Which data Controllers/Processors

The Act addresses persons who are termed data controllers and data processors. These are owners  who determine whether and how data should be processed as well as third parties who are authorized processors of data for owners. 

Data controllers/processors which are established in Barbados are subject to the Act. Those which are not established in Barbados but which sell goods or services to individuals in Barbados are also subject to the Act.

What is data?

The definition section is critically important. Firstly is the information which you collect considered data? Well data seems to be information which is subjected to an automated process and from which you are able to identify an individual. Or any relevant process from which an individual can be identified even though not automated.

After the information is collected and the person carries out any process adapts, organizes or alters the information and then uses it for any number of purposes including the profiling of the individual then one would be engaged in data processing.  

Entities which collect data from individuals and do not engage in the processing of the data in any way would not be subject to the Act. Those which engage in manipulation of the data would be subject to the Act.

HOW TO PROCESS DATA LAWFULLY

• The data controller/processor must get the consent of the individual who is giving his/her data or must be required by law to process the information. It must be clear that consent is requested and given.

• Entities which are data controllers/ processors must be registered and The Commissioner of Data Protection is required keep an up to date register of data controllers and processors.

• They are also required to put security appropriate measures commensurate with the risk of loss destruction or damage in place to protect the data in their possession.

• The entity must establish binding corporate rules especially concerning data security.

Appointment of a Data Privacy Officer

• Public Authorities responsible for processing a large body of private information must appoint a Data Privacy Officer or Officers as is necessary to ensure compliance with the Act. One would imagine that this includes entities such as those mentioned previously such as NIS and BRA, but must now also include entities such as the Queen Elizabeth Hospital.

• A Data Processing Officer must also be appointed where the core activity of the data controller/processor is the processing of data. Thus the processors working on behalf of data controllers must also appoint one.

Data Impact Assessment

• Where the processing of the data and it is likely to result in a high risk to the rights and freedoms of an individual, the data controller must, prior to the processing, carry out an assessment of the impact of the envisaged processing operations on the protection of personal data.
• An appropriate notice must be sent to the individuals whose data is being processed as well as to the Commissioner of Data Protection.

Responsibility for Inaccurate Information

• The data controller will not be responsible where the information is received inaccurately from the individual or from a third party where the data controller took adequate steps to ensure its accuracy. Any inaccuracies must be corrected immediately

EXEMPTIONS

• There are certain general exemptions to the Act which are National Security, Crime and Taxation.

ADMINISTRATION OF THE ACT

Commissioner of Data Protection

• The Act has provision for a Commissioner of Data Protection who is responsible for administering the Act. Staff is also to be appointed to work with the Commissioner. The Commissioner also has a duty to educate the public on the Act, including children.

• Quite interestingly section 96 of the Act allows anyone to provide the Commissioner with information even if the law prevents it. This seems to provide the Commissioner with considerable access to information, one might even say unwarranted. It is not clear however whether it protects the individual providing the information.

• The Commissioner may not serve an enforcement notice on a data controller with respect to the processing of personal data for the purposes of journalism or for artistic or literary purposes.

• The Commissioner under a warrant from the High Court has a right to enter premises and examine computers, other equipment and data. Lawyers are exempt from the warrant in circumstances of client confidentiality.

• The Data Controller and Data Processor are required to cooperate with the Data Commissioner since the process inherently requires quite a bit of self regulation with the appropriate notices being given to the Commission. For example where a data impact assessment is required due notice must be given to the Commissioner and the Commissioner must have them published in the Official Gazette. The Commissioner must also be notified of any breach of data security.

Data Protection Tribunal

The Act establishes a Data Protection Tribunal to hear matters concerning breach of the Act. It has the power to impose penalties. A person on whom an enforcement notice, an information notice or a special information notice has been served may appeal to the Tribunal against the notice. Data Controllers and Processors may also appeal against determinations and orders made against them.

 PENALTIES AND REMEDIES

Penalties

• The fine for not following the data protection principles is $500,000.00, three (3) years in prison or both.

• A person who fails to comply with an enforcement notice, an information notice or a special information notice is guilty of an offence and is liable on summary conviction to a fine of $15 000 or to a term of imprisonment of 6 months.

• There is a fine of $10,000.00 where the person is not registered.

• Unlawfully obtaining, selling and offering for sale data is an offence where one may be liable to a fine of $10,000.00.

• Where after a hearing there is an administrative breach under sections 52(1), section 57(1) and sections 60 to 67 there can be a penalty of

Notifications

• Individuals are entitled to know the entity which will be processing their data.
• Where there is any breach of the security system, the data controller must notify the individual immediately and at least 72 hours after he becomes aware of the breach. A Notification must also go to the Commissioner.

• Where the Commissioner of Data Protection is of the view that there is a breach of the Act an Enforcement Notice can be issued which among other things, can prevent the person from continuing to process the data.

Remedies

• Where an individual suffers damage or distress as a result of the contravention of the Act that individual is liable to be compensated.