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Senate OKs junking security deposit rule
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Posted on Dec 09 2008
The Senate has passed a bill removing the security deposit requirement for long-term business certificate applicants.
Members of the Upper House voted unanimously to abolish the requirement, which they called ineffective and unfair to the businesses.
Currently, foreign investors are required to put up a $25,000 surety bond issued by a U.S. Treasury-listed bonding company.
Citing Department of Commerce reports, proponents of the bill say that approximately 80 percent of the total long-term business certificate holders now in the Commonwealth are exempted from any security deposit requirement.
Meanwhile, foreign investors who are subject to the security deposit requirement cannot comply because U.S. Treasury-listed surety bonds are not available in the Commonwealth. Further, the bill’s proponents say, none of the CNMI admitted U.S. Treasury listed bond companies are offering such type of security.
“The Legislature finds it is inequitable to require investors to comply with a provision of law that appears impossible with which to comply. For all these factors, such security deposit requirement must be eliminated,” the bill states.
Sen. Jude Hofschneider sponsored the bill. The measure now heads to the House of Representatives for a vote.
