Businessmen point out advantages of EPA-UE

SANTO DOMINGO.- Dominican businessmen say that the agreement (EPA or European Partnership Agreement) signed this past Wednesday with the European Union (EU), that has 480 million consumers, is a positive one and the best deal that the Dominican Republic has signed, even better than the free trade agreement signed with the United States and Central America, called DR-CAFTA.

As an example, the FTA with the European Union completely opens that market to the Dominican Republic, without quotas or tariffs, and with rules that are compatible with the World Trade Organization (WTO), and this is different than the agreement with the United States.

The EPA with the European Union gives judicial security to 50,000 Dominican families that depend on banana, cacao, tobacco and rum production, because new products will go into Europe under conditions that are unprecedented, among which is Dominican sugar that will start arriving in Europe with a first shipment of 30,000 tons in November.

The free zones will be able to use cloth from anywhere to make clothing for the European market, while keeping their tax advantages, but to export a pair of pants to the United States, the cloth has to come from DR-CAFTA countries or from NAFTA nations. According to sources, these "are not necessarily the most efficient cloth producers", and sugar exports are attached to quotas under DR-CAFTA.

In exchange for this opening up, the Caribbean could exclude those products that were sensitive to competition and put off for 25 years the loosening of European imports. The Caribbean nations negotiated new rules on commercial protection, tourism, cultural cooperation, the push for innovation, decent working conditions and fair trade.

Manuel Diez, the president of the Dominican Industrial Association (AIRD) said he felt that one of the advantages of the EPA in relation to the DR-CAFTA was that the impact on national production is much more limited, since the spiny issue of liberalization will come about in 25 years and perhaps not at all, because many of the products were excluded.

For Diez Cabral, the safeguard measures are more flexible for the economies of the area, since they can be extended beyond the period of liberalization agreed upon, and there is no right for the other side to install compensation measures.

The industrial leader did say, however, that DR-CAFTA and the EPA each have contributions and characteristics that are specific to each and each one contributes to the transformations that the country needs. He said that he believed that DR-CAFTA was real leverage in the push for institutional changes in the country.

http://www.diariolibre.com

Lawyers in lawsuit with road-builder Codacsa to get US$8.5M

SANTO DOMINGO.- Dominican Republic is paying 8.5 million dollars to the lawyers who’ll represent it in the lawsuit with the road-builder and management company Codacsa, before an International Court based in Paris.

Public Works minister Victor Diaz Rúa told the special commission designated by the Chamber of Deputies to investigate the concession contract for the construction of the Eastern Motorway, that the money will be paid "to one of the most prestigious law offices in Washington, extremely qualified in international controversies of this type," but didn’t mention the law firm’s name.

“We’ll be there, the fear and blackmail we’ve already surpassed, we’re in arbitration. They have constituted their lawyers, we’ve constituted lawyers, they have selected their arbitrator, we have already selected our arbitrator, those two referees will have to designate a third party that is going to be president," Diaz told the deputies.

The Public Works minister affirmed that the special commission has the proof that Codacsa has contracted "ghost" companies, which have altered budgets in the highway’s construction, evidence that will be presented in arbitration. "Here there are indications that involve many people in criminal responsibility."


http://www.dominicantoday.com

Wave of debates on reform of Dominican Constitution

SANTO DOMINGO.- Meetings, forums and special sessions on the bill that declares the need to reform the constitution continue this week in and outside the halls of Congress, aimed at debating the proposal submitted by the Executive Branch to the legislature.

The bicameral Commission that studies the initiative will meet 4 p.m. Wednesday to begin discussions on Thursday, and will have a special meeting with the Central Electoral Board judges, to discuss that court's matters, to be adopted in the new Constitution.

The Senate will also begin receiving proposals from various institutions, personalities and citizens wishing to comment on the proposed constitutional reform debate.

http://www.dominicantoday.com

Samaná port’s concession contract raised from US$10M to US$100M

SANTO DOMINGO.- The Dominican Government raised from 10 to 100 million dollars the concession contract for Samaná’s Arroyo Barril (Duarte) port, signed with the company Valley Forge Corporation for the project’s construction, newspaper Diario Libre reports.

The addendum 023/2008 modified the contract that dates from 2001 and has a 30-year period, was signed about three months between the Dominican Port Authority (Apordom), in name of the Dominican State and executives of the company.

It stipulates that the signature is also for the construction of the Pirate port, the extension and new construction of Arroyo Barril’s current footer, a passenger terminal, offices, preparation of the area, and the construction of a second pier next to the present one.

According to Apordom legal consultant Carlos Marmolejos, the variation was done at the investors’ request, who changed their tender of 100 million dollars, 90 million more than the commitment assumed in 2001.

The new signature was done, just like the original contract, without the Congressional approval and without calling for tender offers.


http://www.dominicantoday.com

Dominican Government to cancel Codacsa contract, finish Eastern Motorway

SANTO DOMINGO.- The Government will assume the works to conclude the Eastern Motorway once Congress terminates the contract with Codacsa, the company hired to build the road in 2001, said Public Works minister Victor Diaz Rúa Tuesday.

The official, after meeting with Senate Public Works Commission president Euclides Sanchez, said it’s not necessary to seek new tenders for the work.

Diaz said Codacsa, which has already taken the case to the International Arbitration Court in Paris, alleging breach of contract, has spent only the taxpayers’ money in the project.

He revealed that RD$1.6 billion have been spent in the project, and that the company has failed to meet the contract’s terms when it failed to materialize its pledged investment.

“The company doesn’t want that contract terminated because they have the best deal in the world, the decision to cancel is now in the hands of the senators and deputies,” Diaz said, adding that the contract signed in 2001 doesn’t correspond with the terms of the bidding Codacsa won in 1998.

For his part, Sanchez deplored that the company hasn’t reponded to the Senate’s invitation to defend their position. "They, in a discourteous manner didn’t attend the invitation, we already met with Public Works and once we receive the documents we’ll render a report to the Senate’s plenary session."


http://www.dominicantoday.com

Business Wire: Dominican Government loses court round in US$680M suit

SANTO DOMINGO.- An arbitration tribunal constituted under the France-Dominican Republic Bilateral Investment Treaty released an award last week ruling on the jurisdictional objections raised by the Dominican Republic in a claim brought by TCW and its parent company.

“The claim involves an investment in EDE ESTE, an electric distribution company in the Dominican Republic that serves approximately 600,000 customers and has 1,200 employees. The tribunal rejected the objections raised by the Dominican Government and allowed US$680 million in claims against the Republic to proceed to a final hearing and an award on the merits of the dispute,” Business Wire said.

“We are extremely pleased that the tribunal convincingly rejected the Government's position. This arbitration proceeding goes to the heart of the problems affecting the Dominican electric sector and the unstable legal and regulatory framework. By holding the Government accountable we hope to finally advance the prospect of having a reliable and efficient electric sector for our customers,” said R. Blair Thomas, president of EDE ESTE and group managing Director of TCW, quoted by the Web site.

“On March 15, 2007, TCW and its parent company initiated an arbitration under the bilateral treaty to resolve its allegations that the Republic's treatment of the investment in EDE ESTE has greatly diminished the value of EDE ESTE. The Republic raised objections to the jurisdiction of the tribunal to hear the claims under the Treaty. The Tribunal's decision rejected these objections and now the arbitration will proceed to a final hearing in 2009,” said Business Wire.

http://www.dominicantoday.com

"Deslinde" Procedure Necessary for Real Estate Transactions after April 4, 2009

As you may know, the new Property Registry Law (Law #108-05) that has been in effect since April 4, 2007, and its enabling regulations, have drastically changed Dominican real estate law. One essential element of this modernization has been the requirement of a "deslinde" for all real estate transactions: purchases, sales, mortgages, condominium formation, etc.

A "deslinde" ("segregation" in English) is the legal procedure by which a portion of land within a parcel is segregated from all the other portions within the same parcel. In other words, the deslinde procedure converts a provisional title that guarantees the property right of ownership for a portion of land within a bigger parcel into a definite title that guarantees the ownership of an individual parcel. The result of the procedure is that the segregated portion will become its own parcel with its individual cadastral designation, guaranteed by a definite title. The majority of jurisdictions around the world only recognize and register segregated portions of land and do not allow any transactions of portions of land that are not segregated. The purpose of the new Property Registry Law is to reach exactly the same level of sophistication and security as these modern jurisdictions have had for a long time: no recorded property rights without a deslinde.

Read "Deslinde" Procedure Necessary for Real Estate Transactions after April 4, 2009

Official says investors know of DR-Cafta trade deal’s guarantees

Santo Domingo.- Since last year foreign investors have filed complaints on issues as diverse as electrical distribution, expropriation and public works concessions, taking advantage of the legal guarantees established in the DR-Cafta trade deal, said the Minister of Industry and Commerce.

Jose Ramon Fadul said Thursday that the DR-Cafta has allowed foreign investors to become aware that the agreement provides them with rights and mechanisms to protect their investments.

“Therefore the priority of the agency in charge is to continue encouraging the adoption of the bill for a Law on Commercial Arbitration,” he said.

http://www.dominicantoday.com

Dominican high court ruling protects Bahia de las Aguilas

SANTO DOMINGO.- The Supreme Court upheld the Superior Land Court’s jurisdiction to hear the case of the hundreds of kilometers of registered lands expropriated in Bahia de las Aguilas beach, located in the southwest municipalities Enriquillo and Pedernales, a ruling that bolster it’s status as a protected area.

The high Court rejected the appeals filed by Jose Luis Guzmán Bencosme, Gilberto Jose, Miguel Nelson Fernandez Mancebo, Mantenimientos y Servicios Fernández, C. por A., Aquilino Antonio Méndez, Manuel Carvajal, Antonio Felix Perez and Manuel Carvajal, against the Superior Territories Court sentence of April 22, 2005.

The land-grab scandal of Bahia de las Aguilas, part of Jaragua National Park, began in the early 1990s when officials in the Administration of Joaquin Balaguer forged land deeds to take over nearly 15 kilometers of pristine beaches.

http://www.dominicantoday.com

Dominican Republic Renewable Resources Law Regulations Passed

President Leonel Fernandez recently enacted the much awaited Renewable Energy Bill No. 57-07 regulations. According to the local press, more than RD$3 billion pesos will soon be invested in the renewable energy market of the Dominican Republicwho attracted by incentives such as:

1- 100% exemption on import taxes for equipment and machinery to be used for renewable energy production.

2- 100% exemption on the value-added tax (ITBIS).

3- 100% exemption on income tax for ten years.

4- Reduction to 5% of the tax on foreign financed interest payments.

If you are interested in knowing more about how your company might benefit by investing in renewable energies in the Dominican republic please contact us at info@drlawyer.com or visit our website www.drlawyer.com

Dominican Customs Removes Tax

The Customs Department has removed the 10% tax of the value of the Cost, Insurance and Freight (CIF) on reshipments because the tax is illegal under the terms of the DR-CAFTA trade agreement. Listin Diario explains that the tax was contrary to article 3.8 on import and export restrictions, found in chapter 3 on National Market Access.

Dominican Visa Requirements Waived for Citizens of Several Countries.

Foreigners with up-to-date passports and visas issued by the European Union, the US, UK or Canada, as well as nationals from the countries listed below will have their Dominican Visa requirements waived and will be allowed to enter the country only by purchasing a tourist card at their port of entry.

Andorra, Bahrain, Belize, Botswana, Brunei, Cyprus, United Arab Emirates, Estonia, Fiji, Grenada, Guyana, Iceland, the North Marianas Islands, Marshall Islands, Solomon Islands, Kazakhstan, Kiribati, Kuwait, Latvia, Liechtenstein, Lithuania, Micronesia, Malaysia, Malta, Mauritius, Namibia, Nauru, Qatar, South Africa, Romania, Samoa, Seychelles, Singapore, Thailand, Tonga, Turkey, Tuvalu and Vanuatu.

European Union-Caribbean Economic Parnership Agreement reached

The Dominican Republic will benefit from aspects of regional preference that were introduced in the European Partnership Agreement between the European Union and Caricom and the Dominican Republic completed on 16 December 2007, in time for the 1 January 2008 implementation date. According to Ivan Ogando at the Ministry of Foreign Relations, the EPA will also facilitate the export of Dominican products to Caricom countries, far beyond what the FTA with Caricom had accomplished. The new agreement replaces the Cotonou Agreement that expires at the end of this year.

Ambassador Richard Bernal, chief negotiator for the Caribbean, described the EPA as historic in terms of content and precedent:"It will promote and deepen the economic ties between the two longest running integration processes in the world. It will enhance our trade in goods because the European Union is providing duty-free, quota-free access and we are liberalizing access to our market," he told a media conference on Sunday.

Interestingly, the agreement includes a provision that gives citizens of the Caribbean access to Europe's entertainment services market, for instance. This will allow musical performers and artistes to move into Europe to present their talent and to seize business opportunities. This is a novelty that was very difficult to achieve," said Deputy Director General for Trade of the EU Commission, Karl Falkenberg, who signed the document for the EU, told CANANews. The Caribbean Regional Negotiations Machinery office says that while the culmination of this negotiation process has come later than previously scheduled, CARIFORUM countries, by completing the EPA before the end of the year, have ensured that their product exports to the EU will not have to face Generalized System of Preferences (GSP) treatment or face Most Favored Nation (MFN) duties in 2008. As of 1 January 2008, with a temporary exception for rice and sugar, all CARIFORUM goods will be entitled to duty-free and quota-free access to the European Union. Importantly, CARIFORUM is the first group within the ACP to clinch a comprehensive agreement that covers not just goods but services, investment, and trade related issues such as innovation and intellectual property.

The major elements of the agreement concluded between the European Community and Cariforum countries are as follows:

1. Cariforum liberalizing 86.9% with 82.7% within the first 15 years. The agreement will result in the liberalization of 92% of Cariforum-EC trade;

2. A general moratorium of three years on all tariff lines except motor vehicles and parts and gasoline that will benefit from a 10-year grace period;

3. Other duties and charges are to be maintained during the first seven years and then phased out in years 8, 9 and 10.

4. In addition to the SP quotas, a transitional TRQ of 60,000 tonnes split evenly between CARIFORUM SP members and the Dominican Republic. In addition, a joint commitment to ensure that shortfalls of any CARIFORUM SP member will be reallocated to another CARIFORUM SP member;

5. Award of MFN treatment to major trading partner defined as countries garnering 1% and 1.5% of world merchandise exports and services.

6. In services, CARIFORUM LDCs and MDCs have committed to 65 and 75% respective sectorial coverage with a standstill clause and provisions for future liberalization. BAH and HAI will submit their respective liberalization schedules in six months;

7. CARIFORUM CSS in entertainment services will enjoy access without any restrictions in all EU Member States with the exception of Austria and Germany;

8. Joint Declarations on Development Cooperation, Bananas, Sugar Allocation and Traditional Agricultural Products; The JD on Development Cooperation includes a commitment to channel EPA support through the CARICOM Development Fund.

9. Regional preference to be awarded one, two and five years in the case of CARIFORUM MDCs, LDCs and Haiti, respectively.

10. The Trade Partnership for Sustainable Development (Development Chapter) includes support for infrastructure while the preamble of the Agreement states that full account should be taken of the CARICOM Development Vision.

Source: www.dr1.com

Dell Ordered to Pay US$3.6 Million for Breach of Contract

According to Dominican media reports, a Santo Domingo court sentenced the local Dell, Inc. subsidiary to pay RD$116.5 million (approximately US$3.6 million) in indemnification to Dominican information technology firm Xolutiva, S.A. The Dominican company sued Dell for RD$300 million for violating its rights as the Dell’s local representative. The Civil and Commercial Chamber ruled against Dell for violating Law 173 on International Representations, holding that Xolutiva represented Dell in the country since 1997, but Dell unilaterally decided not to renew the contract without due compensation. The court ordered Dell to close its operations in the Dominican Republic.