Members concerned of jurisdiction of litigations should problems arise between Bhutan and EIB
The government will once again table the controversial European Investment Bank (EIB) framework agreement for ratification in the upcoming session that will begin on November 26.
The National Assembly (NA) had deferred the agreement, which was signed by the second government in December 2014, after it was rejected by the second National Council (NC) in 2015 on the grounds that it was not in consonance with the country’s external commercial borrowing guidelines and that it could undermine Bhutan’s sovereignty.
The 13-member economic and finance committee of NA recently reviewed the agreement on the request of the government which will review the committee’s comments. Ratification of the agreement will involve establishment of an EIB office in Bhutan.
The country has two international banks—Asian Development Bank and the World Bank—today. The EIB is a publicly owned international financial institution whose shareholders are the EU member states.
Chairman of the committee, Kinley Wangchuk, said that the committee had reviewed the EIB framework agreement mainly from the national security point of view. He was of the view that there were more good than harm in its ratification, reasoning that EIB would be a third option for borrowings for the country.
The committee is said to have recommended to the government that litigations between Bhutan and EIB, should they arise, should be brought under the jurisdiction of Bhutanese courts. “We want our own courts to have a say in case of issues,” Kinley Wangchuk said.
As per the EIB framework agreement, cases would be dealt in the European Court of Justice, which the second NC felt would undermine the sovereignty.
A few members are of the view that the conditions of the EIB framework agreement should be re-negotiated before presenting it in Parliament. Unlike Bills, international agreement cannot be amended by Parliament.
Members who are reviewing said that only some of the objectionable contents of the agreement has been reviewed by the government and addressed and that some of the clauses still needed to be fine-tuned. Members, however, did not share what the remaining objections were about.
Opposition Leader Dorji Wangdi said that the finance ministry (MoF) had done a job good in revising the framework agreement based on Parliament’s objections on the previous one.
“It looks encouraging but some issues still need to be fine-tuned especially on harmonising with national legislations, external commercial borrowing mechanisms and immunities and privileges,” he said.
The framework agreement states that the EIB can enjoy full legal personality in the territory of Bhutan, including in particular the capacity to contract, to acquire and dispose of movable property and to be party to legal proceedings. In particular, the bank will have free access to the national financial market in Bhutan.
The NC’s foreign relations committee is reviewing the agreement. The Council in 2015 had recommended rectifying the clauses that it felt were not in the best interest of the nation.
The committee’s chairman Dhan Kumar Sunwar said that the committee had not formed an opinion as the review and consultation works were ongoing. Eminent member Tashi Wangyal, who was in the second NC remains in the committee.
The NA’s economic and finance committee members, according to its chairman, Kinley Wangchuk, were largely positive about the agreement. The agreement was passed by the National Assembly in 2015.
Finance Minister Namgay Tshering said that it would be tabled for ratification in the upcoming session. He said that ratification of the agreement would help the country fulfill the financial needs.
Under the agreement, Bhutan should exempt representatives of the bank, while they are engaged in activities connected with or in implementation of this Agreement, from immigration restrictions and alien registration formalities.
In respect of all matters not specifically contemplated above, representatives of the Bank shall be granted the level of immunities and privileges which is no less favourable than that granted to officials of the most favoured international institution in Bhutan.