do business in the Dominican Republic - Pellerano & Herrera

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DOING BUSINESS INTHE DOMINICAN REPUBLICPREFERENTIAL TRADE SYSTEMIn general, all products originating in ACP countries are exempted from customsduties and quantitative restrictions when they enter the EU. The limitations tothis rule result from (i) the restrictions imposed to certain products pursuant tothe Common Agricultural Policy of the EU, and (ii) the quotas established to ACPcountries for products like sugar and meat.The rules of origin include basically the following provisions:Products obtained completely in ACP countries, such as minerals andvegetables, are considered to be originating entirely” in those countries.The product may have been “substantially transformed” in an ACP country. Inthis case the final product shall fall into a tariff category completely differentthan that of its non-original components.Non-original components cannot account for more than 15% of the productvalue.All ACP countries are considered as one territory.The product may be entirely obtained in the EU, in the territories or possessionsof the EU, or in certain developing countries located in the nearbyregion of ACP countries, and then processed in an ACP country.Certain elements of the manufacture process deemed to be neutral (electricity,equipment, tools, etc.) do not have to originate in the ACP country.Dominican exports to the EU have been increasing gradually under this preferentialsystem.The main trade partners of the Dominican Republic in Europe areSpain, Germany, Italy,The Netherlands, France and the United Kingdom.The mostimportant exports are tobacco, textiles, bananas, pineapples, coffee, rum, electronicalarms and oranges.4REGIONALALLIANCES48The Dominican Republic is making efforts to accelerate the commercial integrationof the countries of Latin America and the Caribbean.The Government, awarethat the globalization trends require that countries adapt themselves to theschemes of liberalization that will soon prevail worldwide, has decided to activelypromote the commercial integration of the countries of the region. TheDominican Republic has thus become one of the drivers of this process, whichimplies a significant change in the country's international relations when comparedto the relative isolation of the country during the previous decades.In line with the above,in February 1997 the Executive Power created the NationalCommission for Commercial Negotiations with the attribution of negotiating thesignature of trade agreements in a successful and profitable manner for theDominican Republic.This Commission formed the Negotiator Team that has beencarrying out the process of negotiation with the countries of the region.The civil and business community, in a level of organization and co-operationnever experienced before, has also participated actively in the negotiations.The
Pellerano & HerreraAttorneys at lawdifferent economic sectors, through the Consultant Committee, have helped toidentify the national priorities, and thus to determine the goals which theNegotiator Team seeks to achieve in every round of negotiations.The negotiation policy of the Dominican Republic has been guided by a firmapproach to the closest geographic region, proposing the formation of a “strategicalliance” with the countries of Central America and CARICOM (includingHaiti), in the understanding that a joint block of all these nations will allow, notonly to widen the market and export capacity of each country, but also to negotiatetogether with the big blocks of the hemisphere (NAFTA, MERCOSUR,DR-CAFTA and Andean Group) and thus have a stronger position before them.The country has already signed a Free Trade Agreement with Central America,another similar agreement with CARICOM and a Trade Agreement with Panama.With CARICOM it shares the Forum of ACP Caribbean Countries, as members ofthe Cotonou Agreement (CARIFORUM).Central America, CARICOM, the Dominican Republic and other nations belong tothe Association of Caribbean States (ACS).Furthermore, after several negotiations, in March 2005 the Dominican Republicbecame a member of the Free Trade Agreement signed between the United Statesand Central America.Finally, the Caribbean region moves, together with the American Hemisphere,towards the Free Trade Agreement of the Americas, FTAA, that was scheduled tobe concluded in the year 2005. However, the negotiations have not yet been ableto lead to an agreement between the participating countries.All these movements must be framed within the regulations of the World TradeOrganization (WTO), of which the Dominican Republic is a member havingsigned the Marrakech Agreement on April 1994.49FREE TRADE AGREEMENT WITH CARICOMThe Caribbean Community or CARICOM provides for political co-operation andthe creation of a common market among the English speaking countries of theregion, namely Barbados, Guyana, Jamaica,Trinidad & Tobago,Antigua & Barbuda,Belize, Dominica, Grenade, Monserrat, Saint Kitts & Nevis, St. Lucia, St. Vincent,The Grenadines and The Bahamas.The requests made by the Dominican Republic to become a member of CARI-COM were rejected. However, after intensive negotiations carried out from July1997 until August 1998, the parties agreed to sign a free trade agreement. On 22August 1998, after the conclusion of the Special Meeting of Heads of State andGovernment of CARIFORUM celebrated in Santo Domingo, the Free TradeAgreement between CARICOM and Dominican Republic was signed. Congressratified this agreement on January 2000.The entry into effect of this agreement allows more than 85% of the commercebetween both markets to be free of tariffs, for an estimated 47 million consumers.The agreement contemplates the granting of free access of more than
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