US VIRGIN ISLANDS LAW AND PRACTICE Contributed by: Marjorie Roberts, Sean Foster, Renée Marie André, Lisa Wisehart, David Bornn, Duncan J. J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
1. Legal System and Regulatory Framework 1.1 Legal System
criminal cases under local territorial law. Decisions of the District Court of the USVI are appealable to the US Court of Appeals for the Third Circuit (headquartered in Philadelphia, Pennsylvania) and, ultimately, to the Supreme Court of the United States, similar to cases arising from Delaware. In parallel with the federal District Court, there is a two-tier territorial judiciary. The Superior Court of the USVI is the trial court of general jurisdiction that pre - sides over both criminal and civil cases, appeals from territorial administrative agencies, and a specialised family division, including juvenile matters. The Supe - rior Court also has a magistrate division that presides over probate matters, landlord-tenant disputes, small claims, traffic violations and certain misdemeanours. Decisions of the Superior Court are appealable to the USVI Supreme Court. Decisions of the USVI Supreme Court are appealable to the Supreme Court of the United States. Like most of the fifty states, the USVI follows the common law tradition in which judge- made case law informs legal decision-making. 1.2 Regulatory Framework for FDI The USVI is part of the United States; therefore, feder - al statutes governing foreign investment in the United States, such as the Foreign Investment Risk Review Modernization Act of 2018 and the regulations prom - ulgated thereunder, apply in the USVI. Consequently, transactions involving foreign investment in the USVI are subject to the same federal requirements as those on the US mainland. Further, the USVI is included within the definition of “United States” in the United States’ extensive net - work of Treaties of Friendship, Commerce, and Navi - gation, and Bilateral Investment Treaties, officially known as Treaties Concerning the Encouragement and Reciprocal Protection of Investment. These treaties provide a number of important benefits, most notably protection against expropriation. The US International Trade Administration lists Bilateral Investment Treaties currently in force between the United States and 40 countries. In addition, the International Trade Admin - istration lists six treaties that have been concluded but have not yet entered into force. In contrast, the USVI is not included in the United States’ network of income tax treaties (nor are other US territories), and
The legal system of the United States Virgin Islands (“USVI”) is, in most respects, similar to the legal sys - tems of the fifty states of the United States of America. Federal sources of law, such as the Constitution of the United States, statutes enacted by the US Congress, regulations promulgated by US administrative agen - cies, and executive orders issued by the President of the United States, are generally applicable in the USVI. However, because the USVI is an unincorpo - rated territory of the United States, Congress may vary the applicability of most federal laws in the USVI in a way that deviates from the fifty states. For example, the USVI constitutes a separate customs zone with different tariff rates from the rest of the United States (based on the Danish customs law in effect when the United States purchased the USVI from Denmark in 1917) and Congress has authorised unique variations in the federal income tax laws in the USVI that differ from the uniform federal income tax laws in the fifty states. Congress has, through the Revised Organic Act of 1954, as amended, and its predecessor Organic Acts, also established a territorial government for the USVI that includes a locally elected governor, a locally elected unicameral legislature, locally created admin - istrative agencies, and a judicial system discussed below. The Virgin Islands Legislature may enact gen - eral statutory laws for the territory (subject to the veto of the governor) to the extent they do not conflict with federal law. The legislature may also grant rule-making authority to the executive agencies and the governor has the power to issue executive orders. The USVI judicial system comprises both federal and territorial courts. The jurisdiction of the federal District Court for the Virgin Islands is substantially similar to that of the federal district courts in the fifty states. However, because Congress established the District Court of the USVI pursuant to its authority under Arti - cle IV of the US Constitution, rather than Article III, there are some important differences. For example, the District Court has exclusive jurisdiction over income tax matters in the USVI and may preside over some
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