Tougher fines vs. business without license disapproved

Citing its potential unconstitutionality, Gov. Pedro P. Tenorio has disapproved legislation seeking tougher penalties against businesses operating without a government license.

The proposed $50,000 fine and imprisonment of up to five years as punishment for not having the license is disproportionate to the offense and therefore appears to be unconstitutional, he said in vetoing HB 12-45.

The governor also noted that while the bill sought the additional of criminal penalties to civil remedies available under existing laws, it would have repealed these provisions if he signed this into law.

He said the secretary of finance will no longer have the authority to issue a cease and desist order and the alleged violator can continue to do business during the judicial process.

Without the civil remedies, businesses will continue to operate should the criminal conviction fail, added Mr. Tenorio.

“I understand the reasoning behind the passage of this bill. I believe that those who do business illegally without a business license should and must be penalized for violating our laws,” he told lawmakers.

“However, this bill contains several provisions which cause me to be concerned,” said the governor, adding his administration is ready to assist the Legislature in re-drafting the measure.

Sponsored by Rep. David M. Apatang, HB 12-45 would have amended PL 11-73 that allows the Department of Commerce to impose administrative sanctions against businesses without license.

It could have charged violators with a felony crime that would be punishable by jail sentence, aside from the stiff fine.

The legislation was filed amid concerns over proliferation of pre-paid phone cards sold in local stores and foreign remittance service centers on the island, which may not be permitted to do business here.

The House Committee on Judicial and Government Operations endorsed the bill in March, saying that the present law is inadequate in encouraging businessmen, especially those small-time investors, to obtain the proper license issued by the commerce and finance departments.

With severe penalties, lawmakers were hoping to step up consumer protection against unscrupulous businesses that have mushroomed over the years without first seeking permit from the CNMI government.

At present, no government agency has any enforcement powers to apprehend business owners violating Commonwealth laws.