Thursday, August 13, 2020
By NEIL HARTNELL
Tribune Business Editor
The inability of the government’s key commercial agencies to function amid the COVID-19 lockdown is “dragging commerce down” and slowing what little activity remains, an attorney warned yesterday.
Carey Leonard, the Freeport-based Callenders & Co attorney, told Tribune Business that “to all intents and purposes” commercial legal activity in the city had been halted with the closure of its Registrar General’s Department office.
With mortgage and real estate-related work effectively shut down, Mr Leonard said that apart from a “further slowing of the economy” the closure was also impacting the government’s own meagre cash flow as VAT and Stamp Duty-generating transactions were now being delayed.
“You may as well say it’s completely closed,” he told this newspaper. “We cannot file documents and we cannot do any searches. Effectively, it means you cannot do any conveyancing transactions.
“The idea of working remotely from home doesn’t work if the government isn’t working. It’s fair to say, I think, that the legal profession’s commercial side to all intents and purposes has been shut down.”
Providing further insight into this impact, Mr Leonard added: “If there’s a banking transaction, where you’re loaning money to a business or individual, you have to make sure there are no additional liens or charges that have been placed on the property or business that you are dealing with as loan security.
“You now can’t do a mortgage with a business or individual because you cannot find out the current status [of the security].... We often go and see the number of receipts showing what documents have been filed in the past week, and we can’t do that.
“How can you tell a bank to go ahead with this loan, whether it’s $100,000 or $1m? I would have to give a very qualified opinion.” The Callenders & Co attorney also confirmed that the inability to lodge and record title deeds meant real estate purchasers would not have full security for their acquisitions, while title searches have also been halted for the time being.
As for the Companies Registry, Mr Leonard said that businesses and their attorneys will be unable to obtain certificates of good standing, which are required to obtain VAT Taxpayer Identification Numbers (TINs) and are often requested by multiple government revenue agencies as part of their compliance checks.
“Business comes to a halt. It’s very difficult for business to function and move forward,” he told Tribune Business of the consequences. “It just drags commerce down. If you were going to do a big order for Christmas, and need to borrow $250,000 to fund it, well good luck to you.
“There are key commercial aspects of government that must operate in order for everything else to work. It just drags down the economy. It’s a huge contributor to the further slowing of the economy. And the Government doesn’t get the revenue.
“If a mortgage closes, there’s Stamp Duty on it, and on a conveyancing there’s VAT. The Government could continue to earn revenue but is not going to because its agencies are not functioning.”
Any revenue is likely to be delayed or deferred until the present shutdown is over. However, Mr Leonard argued that the Government needs to “rethink” its maximum lockdown strategy given that most other countries had opted for curbs “not as extreme as ours”. This, he added, was why the present strategy was “hurting the most”.
The Callenders & Co attorney said COVID-19, and the emphasis on digital and remote work, had only added to the urgency with which the Government needed to roll-out information technology (IT) across all agencies and ensure staff were adequately trained.
“The Government has a problem with a number of agencies not working,” he said, “as over the years both governments have used the civil service as a jobs programme and people have been employed not so much for their ability as their connections.
“Over the evolution of time a number of those individuals moved up the ranks of the civil service, so to speak, but the civil service now requires a higher degree of IT savvy. Those people were never trained because of that, and they’re having problems implementing IT because they’re getting push back. When you add in COVID-19 you have a dysfunctional government.”
“The Government must have a serious rethink on how we lockdown and how we can keep the economy going,” Mr Leonard continued. “A lot of this lands at the feet of the inability of government departments. You’ve got to use IT with COVID-19, and they’re getting push back from those persons who have never been computer savvy.
“They cannot operate the equipment, they don’t know how to do it, and they are not prepared to learn. After all, they were not hired because of their ability; they were hired because of their connections. I’m not blaming the present government. It’s something they inherited, but they have to deal with it.”