Published On: Fri, Mar 6th, 2020

WIB wins license fee dispute against Travel Planners

WIB bank Philipsburg main branch - 20200220 JH

PHILIPSBURG – De Windward Islands Bank (WIB) has prevailed in a lengthy legal battle against travel agency Travel Planners over the payment of the 1 percent foreign exchange license fee for bank transfers to the International Air Transport Association (IATA). In 2017 the Court in First Instance ruled that the WIB was not allowed to charge this fee to Travel Planners but the Court of Appeal has now overruled this decision.

The troubles for Travel Planners started back in 2012 when the Central bank decided that the bank account of the IATA in St. Maarten was no longer a resident-account. As a result of this decision, the WIB began charging Travel Planners 1 percent over all payments it made to IATA.

Travel Planners went to court and in November 2017 the Court in First Instance ruled that the WIB was not allowed to charge the license fee to Travel Planners. It also ordered the bank to repay slightly more than $216,000 to the travel agency.

Travel Planners sells airline tickets and pays IATA weekly through its WIB-account. The IATA then pays the relevant airlines. After the Central bank ruled that payments to IATA were payments to a foreign account, the WIB was forced to apply the license fee to Travel Planners bank transfers to IATA.

The court ruled in 2017 that there was no agreement between the WIB and Travel Planners about charging the license fee.

The Central Bank is the central foreign exchange bank for Curacao and St. Maarten, the Court of appeal wrote in its January 17, 2020, ruling. Local banks that are authorized to function as foreign exchange banks have to pay a license fee to the Central Bank each month.

The court ruled that the WIB executes the bank transfers for Travel Planners based on a so-called agreement of assignment (overeenkomst van opdracht). The relevant article in the civil code states about these agreements: “The principal (Travel Planners) has to compensate the contractor (the WIB) for expenses related to the execution of the order.”

The court concludes that the license fees the WIB has to transfer to the central bank must be considered as necessary expenditures.

The WIB said in its defense that Travel Planners had consistently paid the license fees for bank transfers to other foreign entities. Travel Planners did not contest this statement.

“It must have been a disappointment to Travel Planners that the Central Bank no longer classified the IATA-account as a resident-account in 2012, but Travel Planners could not reasonably expect the WIB to absorb the costs or to enter into negotiations about it; that would have been pointless.”

The court voided the November 2017 court ruling and ordered Travel Planners to pay for the costs of the procedure – an amount of around 35,250 guilders ($19,693).

###

Related articles:
Verdict court case WIB vs Travel Planners
Editorial: Court ruling
Court forbids WIB to charge license fee to Travel Planners
Legal or Common Practices?
IATA’s NewGenISS payment options possible loophole for banks