Breaking Vienna Convention Rules To Please Sheik Khalifa of UAE

By: Christopher Gill

Mouvman Seselwa Rasin - Leadership Committee

After all the speeches of the month of June, James Michel has come across as a President that will say anything, do anything, to justify his policy of “Sell Baby Sell”. Under his administration, we have heard every excuse to justify the entry of goods by the plane loads daily, and containers daily, tax free for the residence of Sheik Khalifa. Sheik Khalifa was tendered a large parcel on La Misere for Scr. 1.00 as a gift and we were told, it is necessary to do so. Subsequently, numerous plots have been sold to the same person, we are told it is necessary. As the monstrosity project goes up at La Misere, all materials are brought in tax free and no Customs inspection even takes place. I have personally witness dozens of incidents wherein the large Antonov cargo planes unload cargo uninspected, no taxes paid.

SPPF/PP Says Vienna Convention Gives Sheik Khalifa Tax Free Imports on All Goods

To head this frontal assault on the minds of the People of Seychelles, Mr. James Michel sent Mr. Barry Faure Two (2) months ago to tell us that the Vienna Convention on Diplomatic Relations, 1961, compels the Government of Seychelles to allow Sheik Khalifa to import all goods, tax free into Seychelles. This is completely false and could not be farther from the truth. Even the last IMF delegation to Seychelles was perplexed over the matter, but they had not yet been briefed on the Vienna Convention.

$300 Million Customs Taxes To Be Lost in One Year

It is estimated that by now, the People of Seychelles have lost over $200 Million in lost customs and tax revenue and this number will reach $300 Million by the year’s end, if Sheik Khalifa continues to import into Seychelles, at the rate he is currently.

That amount of money represents ¾ of Republic of Seychelles commercial debt. Had the administration of James Michel, collected this revenue, Seychelles would have been able to pay off the commercial bond debts that bankrupted us in October 2008 and restructured any existing debt to more favourable conditions, and moved on as country, instead of being stuck in limbo as we are now. With that money, James Michel would not have to ask the commercial banks to drop interest rates and make money available to jump start the Seychelles economy. With that money, and the precedence set from collecting it, Seychelles would be on its way to becoming a rich nation as it should be with a fractional population of merely 85,000 inhabitants.

With $300 Million in paid taxes, we would not be facing a collapsing health and medical system. We would have the best medical system $300 Million could pay for with the best medical health managers we could pay to do SPPF/PP’s work. With that kind of money in the coffers we would not need to beg Sheik Khalifa for a medical ambulance for treating patients from the bus accident on Praslin. With that money, we would buy our own generators to provide electricity to Mahe.

Vienna Convention Applies to Diplomatic Missions Not Individuals

In the preamble of the Vienna Convention, it is clearly stated that the Conventions rights are applicable to diplomatic missions, and are not intended to benefit individuals....”Realizing that the purpose of such privileges and immunities is not to benefit individuals but to ensure the efficient performance of the functions of diplomatic missions as representing States” .

The tax free privileges granted to Sheik Khalifa as an individual contradict the very spirit of the Vienna Convention. The Convention is intended to benefit diplomatic missions. The UAE has not even set up a diplomatic mission in Seychelles. 

The Seychelles has been primarily a private second residence for Sheik Khalifa among many others around the world. He comes and goes occasionally.

Additionally, the benefits of tax free concessions under the Vienna Convention, under Article 1 apply to the mission itself. This is clearly restricted to key posts, which includes the 1. Head of Mission, 2. the person in charge of a mission, by a sending State, it does not apply to the Head of State and is in fact, restricted to the diplomatic staff who are agents of the principal Head of State. 

Under Article 14, Heads of Missions are divided into three classes, namely:

(a) ...ambassadors or nuncios accredited to Heads of State...”

(b) Envoys, ministers,....accredited to a Head of State;

(c) Charges d’ áffaires accredited to Ministers for Foreign Affairs.

There are no expressed circumstances under the Vienna Convention that applies to Head of States or private residence of Heads of State where a mission is not already established as in the case of Sheik Khalifa in Seychelles.

Article 23 states:

1. The sending State and the head of the mission shall be exempt from all national, regional, or municipal dues and taxes in respect of the premises of the mission, whether owned or leased, other than such as represent payment for specific services rendered

2. The exemption from taxation referred to in this article shall not apply to such dues and taxes payable under the law of the receiving State, by persons contracting with the sending State or head of mission.

Under the Vienna Convention, tax exemption applies to the premises of the mission. It would not apply to the exemption of goods that are used by a contracting party, if they were building a mission. 

Even if Sheik Khalifa’s residence at La Misere and Barbaron were to be registered as diplomatic missions which they are not, Sheik Khalifa would still be obligated to pay taxes for the works done and materials used by third parties such as ASCON construction company, in spite of the slight detail that ASCON is an illegal company in Seychelles, not registered to do business or conduct any construction works. Ascon would have to pay GOP permit fees, and could not apply for exemption under Sheik Khalifa’s name. It is a violation of our sovereignty . The fact that Minister of Finance approves the GOP permits for 2000 workers does not make it right. It has no authority to approve work permits. That is the domain of Minister of Employment, statutorily.

Sheik Khalifa cannot assert that the goods brought into Seychelles are by diplomatic bag either. Under Article 27, diplomatic bag status is intended for communication purposes, not the building of three huge buildings on top of a La Misere that are over 5 levels high each.

Article 30 says “private residence of a diplomatic agent shall enjoy the same inviolability and protection as the premises mission. Sheik Khalifa is not a diplomatic agent, he is a diplomatic principal, as such the Vienna Convention would not apply to him or his residence, he has to pay his way.

Article 34...

details wherein taxes are due, by missions, as this is not a carte blanche privilege intended to allow someone to walk into a country and have thousands of Antanov flights follow with tax free goods and construction materials, right down to toilet pipes and water tanks, tax free.

Article 34

A diplomatic agent (not diplomatic principal) shall be exempt from all dues and taxes, personal, or real, regional or municipal, except:

(a) Indirect taxes of a kind that are normally incorporated in the price of goods or services;

(b) Dues and Taxes on private immovable property situated in the territory;

This means, a diplomatic agent, has to pay taxes on goods normally incorporated in the price of goods and services. On landing that would mean Customs would have to assess the tax mark up and retail mark up and assess a tax bill for Sheik Khalifa’s goods.

Sheik Khalifa also has to pay taxes on land. Sheik Khalifa is not even a diplomatic agent, he is a principal Head of State. Hence, he would have to pay taxes on all land sales, and taxes on all goods imported into Seychelles for personal use as opposed to mission use, which would be subjected to tax exemption if a mission had already been officially established.

Exemptions may apply to : (a) taxes on goods for official use of a mission, (b) for personal use of a diplomatic agent, which could apply to UAE diplomatic agents, if a mission was set up, but not to a diplomatic Principal for his private residence.

Article 42 says: “A diplomatic agent shall not in the receiving State practise for personal profit any professional or commercial activity”.

Now if Sheik Khalifa and SPPF/PP insist that the Vienna Convention does apply to the Sheik, and he does not have to pay taxes on his goods he imports, than the Convention says under Article 42, he would then not be able to do any business in Seychelles. 

Hence, buying land at Beau Vallon, buying Four Seasons, Buying out Raffles, and Cueriesse Island for example, would violate the Articles of the Vienna Convention. Basically, the Convention envisioned that one cannot enjoy diplomat status and be in business at the same time in a receiving State. The Convention uses the bar words: a diplomat “shall not”...practise for personal profit any professional or commercial activity”. 

A Proposal To Table

Instead of going on and on about this matter as a citizen of Seychelles, as it appears the President of Seychelles cannot ask for reasons unknown to me, I ask that Sheik Khalifa please, with due respect worthy of a Head of State, to pay the back taxes on all goods imported to Seychelles for his private residence which, I reasonably believe has exceeded $200 Million, unless proven otherwise.

We are not against Sheik Khalifa or anyone, and welcome him and everyone to Seychelles, if they pay their way. If Seychellois can pay their way, the rich and well heeled of the world can pay their way as well. To make Seychelles work well, there must not be any exceptions to this rule. 

A little gift here and there is not paying your way, nor is making little cozy deals, paying your way. Paying your way, means paying, every step of the way. Now I do believe the People of Seychelles can give Sheik Khalifa a little credit as follows to be applied to his bill: 1. $8 Million, medical health scanner center,2. Two (2) 8 megawatt generators worth $1 million per megawatt or $16 Million. If there is anything else missing, please mention in comments section. We can leave the interest calculations for the timbering, if the bill is settled soon.

Please pay directly to our creditors holding our bonds and not to the Government of Seychelles. 

Sesel Pou Seselwa!

May God Bless All Freedom Loving Seychellois!