Fuel smugglers are to face harsh penalties with the passage yesterday of legislation enforcing the four-month-old fuel marking system.

Also passed at the National Assembly at its first sitting for the year, were the Small Business Bill and the long-awaited Investment Bill, while a number of other bills were introduced.

The Guyana Energy Authority(Amendment) Bill gives the four-month-old fuel marking process legal authority to cut out fuel smuggling and recover revenue.

Presenting the bill to the Assembly, Prime Minister Samuel Hinds said the government does not want to go around locking people up for the offences, rather, he hopes that people would see the effectiveness of the marking system and desist from the practice.

"But if not we will seek to bring charges against those persons," he warned.

Penalties can mean $5M in fines as well as three to five years' imprisonment. Property including tanks or other assets can also be seized if found to be ill-gotten gains from the trade.

But Hinds added that the marking programme might be stopped once the administration feels that the problem of fuel smuggling is under control.

He said that further regulations would be promulgated to deal with the purity of grades and the mixing of fuels. He said that these regulations would seek to set standards on fuel grades and quality since many persons complain that some of the diesel that they purchase is inferior.

GAP/WPA MP Sheila Holder suggested that while the legislation is good, the government only moved under pressure from the international financial institutions.

"In failing to introduce more timely measures, the government has somewhat contributed to a criminalising of the state," she said.

Since the commencement of the marking process last year several stations have been cited for storing illegal fuel acquired across the border in Venezuela.

Investment Bill

Minister of Tourism, Industry and Commerce Manzoor Nadir had introduced the Investment Bill and the Small Business Bill on August 4, 2003, when they were read for the first time. They were then sent to a Special Select Committee.

The National Assembly adjourned itself into committee yesterday to consider and adopt the committee's reports which were adopted, prior to the bills being passed into law.

The Investment Bill has been many years in the making and was proposed by the Private Sector Commission. The bill was intended to increase the predictability, stability and transparency of the legal regime for investment and to provide a framework for fiscal incentives for investors and direct investment.

It has been one of the commitments given by the government to the international community in exchange for debt relief.

Among the provisions of the bill are measures geared towards agriculture, fisheries, forestry, manufacturing, energy, mineral extraction, handicraft, communications and transport, construction, tourism, trade and professional services.

The legislation also eyes the promotion of international best practices for investment and the provision of a framework for fiscal incentives for investors and direct investment.

Clause 16 states that not withstanding the provisions of the Tax Act, the Government guarantees to stay out of the management of investment enterprises or impose conditions of sale, pricing or distribution of products of those enterprises, except in the pricing of services provided by utilities.

Government shall guarantee the right of the investors and investment enterprises to import and export all or any products free of restriction or limitation, except for products the ownership or possession of which is prohibited by law, or products, which may be determined by the National Assembly.

Clause 18 states that the government guarantees the rights of investors to freely determine the distribution off all profits and dividends, and the right of investors to receive their total share in such proceeds.

As amended, Section 19 of the bill states that investors must give priority to citizens of Guyana in recruiting and hiring their employees.

The Minister of Tourism, Industry and Commerce is to consult with the Investment Promotion Council(IPC) made up of private sector and public sector officials, so as to focus on specific industries or sectors that the government considers may make a contribution to development; specific geographic areas in urgent need of additional investment.

The IPC is to annually review and recommend to the government alterations to the priority list; recommend alterations to the regime of fiscal incentives established for investment, including incentives for tariffs and taxes, import duties and export-oriented enterprises; and to recommend incentives to enterprises that are not on the priority list.

The government, according to Clause 13 of the Bill, shall not compulsorily take possession of any investment or enterprise or any asset of an investor, except for where there is prompt payment of adequate compensation, with interest, from the date of acquisition or taking possession of the enterprise or asset to the date of payment; for a purpose which is according to the laws of Guyana or on a non-discriminatory basis.

Small Business

The Small Business Bill sets out the conditions under which one qualifies as having a small business. A small business has to apply for approval to the small business council by providing various documents. Based on a recommendation from the council, the business would then be eligible for benefits specific to the small business sector.

To be considered a small business an entity must satisfy at least two of the following conditions; employs not more than 25 persons, has gross annual revenues of not more than $60M and has total business assets of not more than $20M.

Further, under this Act the Minister of Tourism, Industry and Commerce is to establish a Small Business Development Fund to provide support and access to financing for small businesses. It will also provide non-financial services and assistance to help small businesses, improve their productivity and competitiveness and provide institutional support for organisations representing, promoting, supporting and strengthening small business. The resources of the Small Business Development Fund will consist of monies appropriated by parliament.