The Dominican Republic WT/TPR/S/207/Rev.1 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. The agricultural sector is supported by various measures, including an average tariff higher 
than that for the economy as a whole, direct paymen ts and marketing and price control programmes.  
Utilization of the quota for chicken is low, the pub lished WTO import quota for rice is less than the 
volume bound and sugar can be imported only to the ex tent necessary to cover a shortfall in domestic 
production. 
2. The Government has taken a number of steps in or der to overcome the crisis in the electricity 
sector, but the consumption of certain types of energy  continues to be highly subsidized.  The import 
of biofuels is prohibited unless there is a shortfa ll in domestic production, and some of the incentives 
for renewable energy generation are conditional on the use of domestic inputs.  Manufacturing 
includes a domestic market-oriented sector and a nother which operates under the free-zone regime 
and accounts for the majority of exports. 
3. The Dominican Republic has made specific co mmitments in 60 of the 160 sectors covered by 
the GATS.  There are no restrictions on foreign inv estment in telecommunications, except in the case 
of public broadcasting services.  Foreign companies may set up in the banking sector, but the 
insurance legislation prohibits insurance comp anies from countries where Dominican companies 
cannot operate from doing business in the Dominican market.  In air traffic, the Dominican Republic offers the fifth freedom in most of its bilateral agreements; cabotage airline companies must be under 
the "effective control" of Dominican nationals.  In practice, foreign vessels may provide cabotage 
maritime transport services.  There are no limitatio ns on foreign capital part icipation in ports and 
airports.  The Dominican Republic imposes various restrictions on the exercise of professions by 
foreigners in certain areas of accountancy, legal servi ces, and architecture and engineering.  Investors 
in certain tourism projects are given tax incentives on condition that they employ Dominican professionals. 
(2) A
GRICULTURAL SECTOR  
(i) General characteristics 
4. The relative importance of the agricultural sect or has declined since 2002.  The sector is 
supported through several measures, including an average tariff that is higher than that applicable to 
the economy as a whole, direct payments and mark eting and price control programmes.  The volume 
of chicken imported has been well below the volume bound at the WTO, while from 2005 to 2007 the 
quota for rice imports at the WTO quota rate was less than the volume bound.  Sugar can only be 
imported if there is a shortf all in domestic production.   
5. The real value added of the agricultural sector, in cluding forestry and fishing, increased at an 
annual average rate of about 3 per cent between 2002 and 2007.1  However, the sector's share of GDP 
fell from 8.8 per cent to 7.7 per cent during the same period.  Livestock farming, forestry and fishing 
account for 55 per cent of the value added and crop farming for the rest.  About 13 per cent of the 
economically active population works in the agricultural sector. 
                                                      
1 On line information from the Central Bank of the Dominican Republic, "Economic statistics:  real 
sector".  Viewed at:  http://www.bancent ral.gov.do/estadisticas.asp?a=Sector_Real. WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 76 
 
 
6. In 2007, agricultural production was valued at approximately RD$81,162 million (about 
US$2,454 million).  The main agricultural products  include rice, coffee, bananas, sugar cane and 
tomatoes.  The main livestock farming activities ar e the production of beef, dairy products, and 
chicken meat and eggs. 
(ii) Support policy and indicators 
7. The Ministry of Agriculture is responsible for policy formulation and direction in the 
agricultural sector.  According to the authorities, since 2003 agricultural policy has been aimed at 
strengthening the domestic agricultural market by en couraging the production of strategic crops with a 
view to expanding exports and meeting domestic  demand.  Moreover, programmes have been 
implemented to enable producers to incorporate technological innovations in their crops, and the 
formation of "clusters" is being promoted to increase the sector's efficiency and competitiveness. 
8. The World Bank notes that the Dominican Repub lic's agricultural policies are discouraging 
the development of crops with export potential (for example, tomatoes) by providing greater support 
for crops that fail to offer the Dominican Republic any comparative advantage, including rice, garlic 
and beans.2  It also notes that the policies have increased the cost of the food basket for consumers.  
The authorities point out that in addition to directing agricultural policy towards strengthening the 
domestic agricultural market they have implemented policy measures to prevent the high prices of agricultural products on the international market  from being passed on to domestic consumers. 
9. The Dominican Republic's latest notificati on concerning domestic support relates to 2007.
3  In 
that year domestic support amounted to RD$1, 820.5 million (approximately US$55 million);  the 
Dominican Republic classified this amount as exempt from the WTO reduction commitment as it fell 
within the green box.  During the period 2002- 2006, annual average domestic support was about 
RD$1,446 million (approximately US$44 million in 2007).4  The Dominican Republic classified all 
the domestic support notified during this period as falling within the green box. 
10. Public expenditure on the agricultural sect or totalled RD$6,284.1 million in 2007, as 
compared with RD$4,037.7 million in 2002 (a bout US$190 and 122 million, respectively).5  
However, as a proportion of total public expendi ture during the same period agricultural public 
expenditure declined, from about 5.5 per cent to 2.4 per cent. 
(iii) Policy instruments 
(a) Border measures 
11. The average MFN tariff rate applied to agriculture (ISIC definition) was 10.7 per cent in 
2008, slightly more than three percentage points hi gher than the average for the manufacturing sector 
(Section (4) and Chapter III(2)(iv)). 
12. Since the conclusion of the Uruguay Round, the Dominican Republic has renegotiated its 
Schedule of Commitments under Article XXVIII of the GATT 1994 with respect to several 
agricultural products.  Within the context of this  renegotiation, the Dominican Republic agreed to 
                                                      
2 World Bank (2005b). 
3 WTO document G/AG/N/DOM/15 of 21 May 2008. 
4 WTO documents G/AG/N/DOM/9 and G/AG/N/DOM/8/Rev.1, both of 25 October 2004. 
5 Law No. 200-01 approving the Budget and Public Expenditure Law for 2002, of 26 December 2001, 
and Law No. 3-07 approving the Budget and Public Expenditure Law for 2007 and its Addendum, of 8 January 2007. The Dominican Republic WT/TPR/S/207/Rev.1 
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grant tariff quotas for imports of chicken meat, maize (corn), dry beans, garlic, onions, powdered 
milk, rice and sugar.6  The Dominican Republic undertook to apply these quotas in their final form as 
from 2004.  Its latest notification concerning imports  of products subject to tariff quotas relates to 
2007.7  Its notification concerning the administration of tariff quotas relates to 2000.8 
13. The average MFN tariff applied to products subject to tariff quotas is about 80 per cent 
(out-of-quota) and 20 per cent (in-quota).  During the period 2004-2007, annual average volumes imported at in-quota tariff rates exceeded WTO bound volumes for almost all products (Table IV.1).  Chicken meat is an exception to the rule: since 200 4 the volume of in-quota imports has amounted to 
between 0.2 and 13 per cent of the bound volume.  Acco rding to the authorities, this is due to the high 
level of domestic chicken production. 
14. The administration of tariff quotas, except for s ugar, is the responsibility of the Agricultural 
Imports Commission, which is composed of the Ministries of Agriculture and Industry and Trade, the Administrative Secretary of the President's O ffice and the Director-General of Customs.
9  Decree 
No. 505-99 provides for the use of the "simultaneous  examination method" for determining access to 
quotas.10  This method consists in assigning the in -quota volume proportionally to importers who 
submit an application not later than two months before the commencement of imports of the product 
in question. 
15. In December of each year, the Agricultural Imports Commission must publish the date of 
commencement of imports of products subj ect to tariff quotas in a national newspaper.11  T h e  
authorities have pointed out that they publish this information both in a natio nal newspaper and on the 
Ministry of Agriculture's Internet site.  Alt hough Decree No. 505-99 requires importers to provide a 
bond enforceable if the volume assigned to the impor ter does not arrive in the Dominican Republic 
within a specified period, the authorities note that this measure is not being implemented.  In-quota 
import volumes assigned are not transferable.  The Agricultural Imports Commission must publish details of the awarding of import volumes for each  product subject to a tariff quota in a national 
newspaper.
12 
16. Once tariff quotas have been assigned, the Ag ricultural Imports Commission issues the 
corresponding import certificates through the Director ate of Agricultural and Livestock Promotion of 
the Ministry of Agriculture.13  Resolution No. 24/2006 of the Minister of Agriculture, issued in 
November 2006, prohibits the Agricultural Impor ts Commission from "granting or refusing import 
licences on the basis of sanitary or phytosanita ry concerns, domestic purchase requirements or 
discretionary criteria".14 
                                                      
6 WTO document G/MA/TAR/RS/54 of 3 November 1998. 
7 WTO document G/AG/N/DOM/14 of 21 May 2008. 
8 WTO document G/AG/N/DOM/6 of 4 February 2002. 
9 Decree No. 603-06 of 7 December 2006, Article 1. 
10 Decree No. 505-99 ("Regulation for regulating imports of agricultural headings under the technical 
rectification of Schedule XXIII of the Dominican Republic at the World Trade Organization") of 
24 November 1999, Article 5. 
11 Ibid., Article 6. 
12 Ibid., Article 9. 
13 Ibid., Article 11. 
14 Resolution No. 24/2006 of the Minister of Agriculture, of 22 November 2006, Article V. WT/TPR/S/207/Rev.1 Trade Policy Review 
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Table IV.1 
Products included in MFN tariff quotas, 2007 
Applied MFN tariff 
rate (%) Bound tariff 
rate (%) Product and HS07 heading 
In-quota Out-of-quota In-quota Out-of-quota Bound quota 
volume
a Average 
utilization 
rate (%) 
2004-07b Trading 
partners 
with 
reserved 
access 
Chicken meat 
(0207.1100, 0207.1200, 
0207.1410, 0207.1491, 0207.1492)
c 25 99 25 99 11,500 5.1 MFN 
Powdered milk 
(0402.1010, 0402.1090, 
0402.2110, 0402.2190, 
0402.2910, 0402.2990) 
20 56 20 56 32,000 89.1  European
Union (70%) 
New 
Zealand (15%) 
and 
others (15%) 
Onions        
0703.1000 25 97 25 97 3,750 152.2 MFN 
Garlic        
0703.2000 25 99 25 99 4,500 131.6 MFN 
Beans        
(0713.3100, 0713.3200, 
0713.3300) 25 89 25 89 18,000 128.0 MFN 
Maize (corn)         
(1005.1000, 
1005.9000)c 0 40 5 40 1,091,000 97.2 MFN 
Rice     17,810 216.3 MFN 
1006.1000 14 99 20 99    
1006.2000 20 99 20 99    
Sugar     30,000 157.1 MFN 
1701.1100 14 85 20 85    
1701.1200, 1701.9100, 
1701.9900 20 85 20 85    
a Tonnes. 
b The utilization rate is the actual impor t volume divided by the bound import quota. 
c WTO Secretariat estimates, the Secretariat had no informati on from the authorities concerni ng the corresponding HS07 headings . 
Source : WTO documents G/MA/TAR/RS/ 54 of 3 November 1998, G/AG/N/ DOM/11 of 16 January 2006, and 
G/AG/N/DOM/14 of 21 May 2008, and info rmation provided by the authorities. 
17. Article 13 of Decree No. 505-99 authorizes the Agricultural Imports Commission "in cases of 
crisis, scarcity or a shortfall in domestic production" to increase the maximum level established for tariff quotas and, moreover, empowers it to determin e "the cases in which su ch an increase in quotas 
need not be accompanied by a corresponding increase in tariffs".
15  The authorities have pointed out 
that Decree No. 505-99 does not limit out-of-quota imports, but establishes criteria for extending in-quota treatment beyond the WTO bound volumes. 
18. During the period 2005-2007, the quotas available for importing rice at the WTO in-quota 
tariff rate, published by the Ministry of Agricu lture, were below the WTO bound volume.  The quota 
in question represented between 86 per cent and 93  per cent of the bound volume of 17,810 tonnes. 
                                                     
 
15 Article 13. The Dominican Republic WT/TPR/S/207/Rev.1 
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19. The Instituto Azucarero Dominicano  – INAZUCAR (Dominican Sugar Institute) is 
responsible for administeri ng the tariff quota for sugar.16  According to INAZUCAR, all sugar imports 
are conditional upon the existence of a shortfall in  domestic production.  INAZUCAR calculates this 
shortfall by taking into account domestic produc tion and consumption and the preferential access 
offered by the United States to Dominican Republic s ugar.  The in-quota tariff rate is applied to 
authorized sugar imports. 
20. The Dominican Republic applies tariff quotas to imports of agricultural products from some 
of its preferential partners.  Decree No. 534-06 gove rns the administration of the tariff quotas applied 
under the Central America-Dominican Repub lic-United States Free Trade Agreement 
(CAFTA-DR).17  The authorities have indicated that the volumes imported in-quota at in-quota tariff 
rates established by the CAFTA-DR are additional to the WTO bound volumes. 
21. The Dominican Republic has not reserved the right to apply the special agricultural safeguard 
for which the WTO Agreement on Agriculture provides. 
22. Since May 2004, exports of cocoa beans and co coa bean products have been subject to a 
"solidarity tax" of RD$4 per kilo  (approximately US$117 per tonne).  This measure was agreed by the 
National Cocoa Commission chaired by the Minister of Agriculture.18  The amount falls to RD$0.50 
per kilo when the producer price in the local mark et is less than RD$1,000 per 50 kilos.  Up to 
September 2006, customs was requiring the expor ter to produce a single export form bearing a 
National Cocoa Commission stamp certifying that th e solidarity tax had been paid.  Customs is no 
longer imposing this requirement. 
(b) Other measures 
23. The Dominican Republic has notified the WTO that it did not grant any export subsidies for 
agricultural products during the period 2001-2006.19 
24. Under the Pledge Programme, rice , bean, garlic and milk produ cers can obtain an interest-free 
loan equivalent to 70 per cent of the value of  the produce they deposit in specified warehouses.20  The 
State pays the costs of storage, including insura nce.  The producers are responsible for selling the 
produce stored.  According to the authorities, the sums allocated to this programme amounted to 
RD$2,200 million (US$72.9 million) in 2005 and RD$3,800 million (US$114.6 million) in 2006. 
25. The World Bank notes that the Pledge Programme  represents "a substantial subsidy" for 
producers, since it "makes it possible to sustain th e price [of the products covered by the programme] 
over time".21  It adds that the programme helps processors  who use rice, beans, garlic and milk as 
inputs to "partially finance their stocks of raw mate rials".  The authorities have pointed out that the 
programme forms part of agricultural marketi ng policy and constitutes a support service with a 
minimum effect on production and trade.  Furthe rmore, two of the programme's objectives are to 
ensure that stocks are sufficient to achieve food security and to promote the development of areas 
dedicated to the crops in question. 
                                                      
16 Decree No. 751-00 of 11 September 2000. 
17 Decree No. 534-06 of 15 November 2006. 
18 Fourth resolution adopted at the meeting of the National Cocoa Commission on Tuesday 
25 May 2004. 
19 WTO documents G/AG/N/DOM/12 of 24 January 2006 and G/AG/N/DOM/13 of 4 January 2008. 
20 The programme is based on the Ministry of Agriculture's Provisional Resolution No. 31-05 of 
2 June 2005. 
21 World Bank (2005b). WT/TPR/S/207/Rev.1 Trade Policy Review 
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26. Within the framework of the Programme of Direct Support for Livestock Farmers, since 
November 2007 these farmers have received RD$3 for every litre of milk they produce (about US$0.09 in 2007).
22  In 2007, a total of RD$13 million (a bout US$393,000) was disbursed under this 
programme.  The State also supports agricultural production by distributing seed, providing 
mechanized soil preparation services and maintaining irrigation systems. 
27. Although the National Price Stabilization Institute is authorized to "regulate" the prices of 
agricultural products, the authorities have indicated th at in mid-2008 the Institute itself was not fixing 
the price of any product.23  The National Rice Commission fixes the price at which rice is purchased 
from the rice producer and the National Council for the Promotion of the Dairy Industry that at which 
milk is purchased from the milk producer.  The Mi nistry of Agriculture is a member of both the 
National Rice Commission and the National Counc il for the Promotion of the Dairy Industry.  
INAZUCAR fixes the maximum selling price for sugar in its marketing stages.24  The authorities have 
pointed out that the Government occasionally acts as a witness or mediator in price negotiations 
between the producers and the processors of certain products, including chicke n, eggs and tomatoes. 
28. Sugar production (both for domestic consumption and for export) is determined annually by 
decree.25  The decree also determines the portion th at each mill can export under the tariff quota 
applied to sugar imports by the United States.  IN AZUCAR does not intervene in the marketing of 
sugar in the domestic market. 
29. Credit for the sector increased at an annual average rate of 18.4 per cent between 2001 
and 2006.  During this same period, sector cr edit averaged RD$3,108 million (about US$94 million 
in 2007).26  In 2006, about 36 per cent was earmarked for rice and 10 per cent for bovine cattle.  The 
poultry, coffee, garlic and bean sectors each received between 3 and 4 per cent of the total.  In 2006, 
half the loan portfolio (some RD$4,911 million or US$148.1 million) was provided by the Banco Agrícola , a state-owned institution, and 45 per cent by the commercial and full-service banks.  
In 2006, Banco Agrícola 's average lending rate was 14 per cent as compared with 17.4 per cent for the 
full-service banks.
27 
30. The Dominican Agricultural and Forestry Research  Institute is the main public agricultural 
research establishment.  Agricultural research polic y formulation is the responsibility of the National 
Council for Agricultural and Forestry Research.  This body provides financing for scientific and 
technological capacity building in public and priv ate institutions.  Between 2002 and 2007, annual 
public expenditure on agricultural research av eraged RD$220.1 million (some US$6.7 million in 
2007).28 
                                                      
22 This programme is based on the Ministry of Ag riculture's Provisional Resolution No. 28-2007 of 
18 December 2007. 
23 Law No. 526 establishing the Price Stabilization Institute, of 11 December 1969, Article 2. 
24 Law No. 619 of 16 February 1965, and Resolution of the Dominican Sugar Institute No. 01-2006 of 
24 October 2006. 
25 See, for example, Decree No. 570-06 providing for the 2007 sugar harvest, from domestic sugar 
mills, to include the entire cale ndar year, of 21 November 2006. 
26 Ministry of Agriculture (2007). 
27 The source of the Banco Agrícola  rate is the Ministry of Agriculture (2007).  For full-service 
banking, the source is the simple av erage of the nominal lending rate in  December 2006 taken from on line  
information from the Central Bank of the Dominican Republic, "Economic statistics:  monetary and financial 
sector" (viewed at:  http://www.bancentral. gov.do/e stadisticas.asp?a=Sector_Monetario _y_Financiero). 
28 WTO documents G/AG/N/DOM/15 of 21 May 2008, G/AG/N/DOM/10 of 16 January 2006, 
G/AG/N/DOM/9 of 25 October 2004, and G/AG/N/DOM/8/Rev.1 of 25 October 2004. The Dominican Republic WT/TPR/S/207/Rev.1 
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31. The requirement to pack coffee for export in ba gs of domestic origin was abolished with the 
entry into force of Regulation No. 819-02.29 
(3) ENERGY  
32. There is still a crisis in the electricity sector  and overcoming it constitutes one of the major 
challenges facing the Dominican Republic.  Under a pl an to ensure the sector's recovery, steps have 
been taken to reduce the pilfering of electricity a nd the State is trying to renegotiate disadvantageous 
contracts concluded between the distribution co mpanies and the generators.  However, the 
consumption of certain types of energy is s till highly subsidized, and this has undermined both 
government finances and the rational use of energy.  In 2007, a law was enacted in an effort to 
increase domestic production of energy from alte rnative sources by giving a number of incentives, 
some of them dependent upon the use of national inputs.  The legislation prohibits the import of 
biofuels if there is no shortfall in domestic pr oduction and foreign State-owned companies may not 
participate in the exploration or exploitation of hydrocarbon deposits. 
(i) Electricity 
(a) General characteristics and performance of the sector 
33. At the end of 2006, the Dominican Republic 's electricity generating system had 
approximately 3,390 MW of installed capacity.30  Of this total, 14 per cent consisted of hydroelectric 
and the rest of thermal power plants.  At the same time, estimated maximum demand amounted to 
2,026 MW. 
34. In 2006, net energy generated to talled approximately 10,710 GWh.31  During the period 
2001-2006 it grew at an annual average rate of 2.6 per cent.  It is estimated that about 16 per cent of 
the total demand for energy was not met in 2006.32  The authorities aim to reduce this percentage 
gradually, until it reaches 5 per cent in 2012.33  In 2006, the average price at which electricity was 
sold to the end user was US$0.1982, one of the highest in the Americas.34 
35. The sector consists of three distribution companies (Edenorte, Edesur and Edeeste), one 
transmission company and 15 generating companies.  Two of the three distributors were nationalized 
in September 2003.  Half of the capital and effectiv e control of the three distribution companies had 
been private since 1999.35  The transmission company is State-owned.  The generators are private, 
semi-public or State-owned.  About 54 per cent of the installed capacity is owned by private 
companies, 32 per cent by companies with private and public capital and the rest by State-owned 
enterprises.  In 2007, the distribution companies bought approximately 97 per cent of the energy 
under contract with the generators;  the rest was obtained on the electricity market.36 
                                                      
29 Regulation No. 819-02 on the harvesting, processing, grading, export and manufacture of coffee, of 
14 October 2002, Article 21. 
30 On line information from the Superintendencia de Electricidad  – SIE (Superintendency of 
Electricity), "Statistics".  Viewed at:  http://www.sie.gov.do/estadisticas.php. 
31 Idem . 
32 Information provided by the authorities in connection with this Review. 
33 Comisión Nacional de Energía  – CNE (National Energy Commission), Corporación Dominicana de 
Empresas Eléctricas Estatales  – CDEEE (Dominican Corporation of St ate-owned Electricity Companies), and 
SIE (2006). 
34 Idem . 
35 See WTO (2002). 
36 Information provided by the authorities. WT/TPR/S/207/Rev.1 Trade Policy Review 
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36. The electricity sector is still immersed in a sever e crisis, mainly due to the problems facing 
the distributors (Box IV.1).  Transfers from the State to the sector totalled US$504 million in 2007.37  
Approximately 40 per cent went to finance the cash deficit of the distribution companies;  22 per cent 
was earmarked for the subsidy that  the Government grants under the blackout reduction programme to 
the inhabitants of areas considered poor;  and the rest  was used to absorb the increase in oil prices and 
finance investment in the distribution system.  At the beginning of 2008, it was estimated that State 
transfers to the sector would amount to US$1,050 million in the course of the year.  When he addressed Congress in February 2008, the President of  the Republic declared that one of the main 
challenges facing the country was solving the problems of the electricity sector.
38 
37. The situation in the sector seems to have stabilized since 2006.39  For example, the proportion 
of energy that the distributors bought but did not charge for, because of technical faults and theft, decreased from 39 per cent in 2005 and 2006 to 34 per cent in 2007.
40  Various indicators relating to 
interruptions in service improved in 2007.41 
38. The comprehensive plan for the electricity sector, prepared at the request of the President of 
the Republic by various institutions in the sector, defines an action plan aimed at:  achieving the 
"financial self-sustainability" of the sector;  reduc ing energy prices for the end user;  ensuring the 
adoption of best management prac tices and approved standards of qua lity and service;  promoting the 
efficient and rational use of energy, the exploitati on of renewable resources and the protection of the 
environment; and improving the cond itions for attracting investment.42  One of the plan's 
recommendations is to strengthen the provisions for preventing and combating the theft of electricity.  
It also recommends the renegotiation of certain c ontracts between the distribution companies and the 
generators.  In November 2005, the Government  set up the Contract Renegotiation Commission.43  
According to the decree establishing the Commi ssion, the contracts in question "suffer from 
distortions clearly prejudicial to the best interest s of the Dominican State [with the result] that the 
operations of the electricity subsector are economically  non-viable".  According to the authorities, one 
contract was renegotiated in 2007. 
                                                      
37 Ministry of the Economy, Planning and Development (2008). 
38 On line information from the Office of the Presid ent of the Dominican Repu blic, "Speech delivered 
by His Excellency the President of the Republic, Doctor Le onel Fernández, on 27 Februa ry 2008".  Viewed at:  
http://www.presidencia.gob.do/app/pre_discursos.aspx. 
39 USAID (undated). 
40 Information provided by the authorities in connection with this Review. 
41 Ministry of the Economy, Planning and Development (2008). 
42 CNE, CDEEE and SIE (2006). 
43 Decree No. 621 of 14 November 2005.  See also on line information from the CDEEE, "Speech by 
Radhamés Segura, Executive Vice-Presiden t of the Corporation, on the renegotiation of electricity sector 
contracts".  Viewed at:  www.cdeee.gov.do/index. php?option=com_docman&task=doc_download&gid=7. The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 83 
 
 
Box IV.1:  Characteristics of th e electricity sector, January 2008 
The factors affecting the performance of the electricity sector identified in the Sector Plan for the period 
2006-2012 include: 
• the losses of the distribution companies and their low investment capability; 
• the high prices paid by the distribution companie s to the generators (US$0.1283 per kWh in 2006); 
• the long terms of the contracts between the generation and distribution companies; 
• the high level of dependence on the use of oil for generating electricity; 
• the difficulty in targeting State subsidies exclusively at people on low incomes; 
• the general reluctance to pay for electricity and the inability of the distribution companies to 
suspend service to customers who do not pay; 
• the inadequate resources of the ins titutions responsible for the sector; 
• the limited coordination capacity of th e State electricity companies;  and  
• the limited capacity for transporting electricity between north and south. 
Source : CNE, CDEEE and SIE (2006), Comprehensive plan for the electri city sector in the Dominican 
Republic :  period 2006-2012, September.  View ed at:  http://www.c deee.gov.do/index.php. 
(b) Legal and institutional framework 
39. Policy formulation rests with the CNE, whose boa rd is composed of the Ministers of Industry 
and Trade;  the Economy, Planning and Developmen t;  Finance;  Agriculture; and Environment and 
Natural Resources;  and the Governor of the Central Bank and the Director of the Dominican 
Telecommunications Institute.44  The supervision and inspection of the electricity sector is the 
responsibility of the SIE.45  There is a coordinating body respons ible for coordinating the operation of 
the generation, transmission, distribution and marketing facilities.46 
40. Law No. 125-01 prohibits the private owners hip and operation of hydroelectric or 
transmission companies.47  However, it allows the State to make  with private parties "the financial 
arrangements necessary to finance, build or temporar ily administer any transmission or hydroelectric 
generation project".48  Moreover, hydroelectric plants of 5 MW or less may be  privately owned.49 
41. Companies in the sector must be dedicated exclusively to generation, transmission or 
distribution and marketing.50  However, the distribution companies Edenorte, Edesur and Edeeste may 
own generating plants provided that the generati ng capacity of each plant does not exceed 15 per cent 
of the maximum demand on the system.  The authorities have pointed out that as at mid-2008, no 
private generating enterprise was linked to  any of the distribution companies. 
42. The generation, distribution and transmission of electricity generally require a concession.51  
The requirements for obtaining a concession are set out in the Implementing Regulations of the 
                                                      
44 General Law on Electricity No. 125-01 of 26 July 2001, Article 12. 
45 Ibid., Article 24. 
46 Ibid., Article 38. 
47 Ibid., Article 41, paragraph IV. 
48 Ibid., Article 131. 
49 Law No. 57-07 on encouraging the development of renewable sources of energy and their special 
regimes, of 7 May 2007, Article 5, paragraph II. 
50 Law No. 125-01, Article 11. 
51 Ibid., Article 41, paragraph II. WT/TPR/S/207/Rev.1 Trade Policy Review 
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General Law on Electricity.52  Distribution service concessionaires have the exclusive right to supply 
the users subject to regulated prices in each concession zone.53  According to the authorities, since 
2001 about 20 concessions have been granted for el ectricity generation and no application has been 
rejected. 
43. The SIE is authorized to place ceilings on the pr ices that distribution companies apply to users 
with an installed capacity of less than 1.3 MW in 2008 ("regulated" or "public service" users).  The 
supply of electricity to regulated users accounts for about 92 per cent of the total electricity supply. 
44. Law No. 186-07, promulgated in August 2007, define s those acts which constitute "electricity 
fraud" and lays down the corresponding penalties for the purpose of combating the theft of 
electricity.54  The International Monetary Fund points out  that this initiative is an important step 
towards improving the financial situation of the sector.55 
45. Generating companies with an installed cap acity of 15 MW or more may purchase fuel 
without paying hydrocarbon tax,56 as may companies that generate th eir own electricity, provided that 
at least half the energy they generate is fed into the national grid. 
(ii) Other energy 
46. The Dominican Republic meets its primary ener gy demand mainly with imported oil.  In 
2007, it imported 50 million barrels of oil equivalent; the value of its imports of oil and oil products 
amounted to US$3,300 million, which represented 32 per cent of imports and 8 per cent of GDP.57  
There are no proven reserves of oil in the Dominican Republic.58 
47. Each month the Dominican Republic can purchase on credit 50,000 barrels of oil a day under 
the Petrocaribe Energy Cooperation Agreement signed  with the Bolivarian Republic of Venezuela in 
September 2005.  It also purchases oil from Me xico and Venezuela under the San José Accord.59 
48. The largest refinery in the Dominican Republic, the Refinería Dominicana de Petróleo , is 
owned by the State and a foreign company.  In November 2007, the President of the Republic announced that the State would buy the part that the foreign company had previously put up for sale in order to become the sole owner.
60  The President has stated that this measure would enable the 
Dominican Republic to import all the oil due to it under the Petrocaribe Agreement. 
49. Private companies must conclude a contract with the Government to explore and exploit 
hydrocarbon deposits.61  These contracts must be approved by Congress.  The law prohibits the State 
from granting hydrocarbons exploration and expl oitation rights to "foreign governments and 
                                                      
52 Ibid., Articles 62 et seq . 
53 Ibid., Article 53. 
54 Law No. 186-07 of 6 August 2007 introducing amendments to the General Law on Electricity 
No. 125-01 of 26 June 2001, Article 6. 
55 IMF (2008). 
56 Decree No. 176-04 of 5 March 2004. 
57 Ministry of the Economy, Planning and Development (2008). 
58 On line information from the United States Energy Information Administration, "World Proved 
Reserves of Oil and Natural Gas, Most Recent Estimates", of 9 January 2007.  Viewed at:  
http://www.eia.doe.gov/emeu/international/reserves.html. 
59 See WTO (2002). 
60 On line information from the O ffice of the President of the Repu blic, Speech on energy saving and 
efficiency, 15 November 2007.  Viewed at:  h ttp://www.presidencia.gob.do/app/pre_discursos.aspx. 
61 Law No. 4532-56 (Petroleum), Article 1. The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 85 
 
 
sovereign entities" and their partic ipation as "partners, associates or shareholders" of a person with 
exploration or exploitation rights.62  Other foreign persons may obtai n hydrocarbons exploration and 
exploitation rights if they undertake "exclusively to  respect … the jurisdiction of the courts and the 
legislation of the Dominican Republic".63  In mid-2008, Congress was considering changes in the 
sector's legal framework. 
50. The Ministry of Industry and Trade fixes th e consumer prices and trading margins for 
hydrocarbons.64  The Ministry determines the prices week ly as a function of international oil prices 
and the exchange rate. 
51. Law No. 112-00 requires the State to subsidize liquefied petroleum gas (LPG) "for domestic 
use".65  Up to 2004, the subsidy was granted to a ll LPG users.  Decree No. 1068-04 abolished the 
subsidy for industrial users, hotels and restaurant s and "any other user [that purchases gas] in 
containers larger than 100 pounds or 22.5 gallons".66  During the period 2004-2007, the annual 
expenditure resulting from the LPG subsidy averaged RD$5,706 million (approximately 
US$173 million in 2007).  Since the end of 2007 the St ate has subsidized one million gallons of diesel 
per month for vehicles that transport passengers, food and building materials.67  In February 2008, the 
Ministry of Industry and Trade announ ced the extension of this subsidy.68  According to the 
authorities, the expenditure resulting from this  subsidy amounts to about US$611 million. 
52. Law No. 57-07, promulgated in May 2007, offe rs incentives for "increasing national energy 
diversity as regards self-sufficien cy in the strategic inputs constituted by alternative fuels and 
energy".69  Producers of biofuels and energy from renewable sources may import equipment free of 
duties and taxes.70  Their income from the sale of energy is exempt from income tax for 10 years.71  
The income from the sale of equipment of domestic  origin for producing biofuels or energy from 
renewable sources is also exempt from income tax.  For equipment to be regarded as of domestic 
origin 35 per cent or more of its valu e added must be of domestic origin. 
53. Law No. 57-07 requires biofuels to be blended w ith fossil fuels for road transport vehicles in 
the proportions defined by the CNE.  Producers must obtain a production quota for supplying the 
domestic biofuel market.  The CNE is the body auth orized to distribute these quotas and is required to 
give preference to producers that use domestic raw materials.72  Biofuels may be imported "if 
domestic production is insufficient to ensure  that an adequate service is provided".73  Biofuels may be 
exported "insofar as the domestic supply of such fuels is guaranteed".74 
                                                      
62 Ibid., Article 4. 
63 Idem.  
64 Law No. 112-00. 
65 Ibid., Article 1, paragraph I. 
66 Decree No. 1068-04 of 30 August 2004 providing for the elimination of the subsidy on liquefied 
petroleum gas (LPG) for use by industry, hotels and restaurants and any other user of containers larger than 
100 pounds, Article 1. 
67 Decree No. 677-07. 
68 On line information from the Ministry of Indu stry and Trade, "SEIC News: government extends 
subsidy to diesel", 20 February 2008.  Viewed at:  http://www.seic.gov.do/Lists/Noticias%20SEIC/ 
DispForm.aspx?ID=33. 
69 Law No. 57-07, Article 3. 
70 Ibid., Article 9. 
71 Ibid., Article 10. 
72 Decree No. 202-08, Article 234. 
73 Law No. 57-07, Article 22. 
74 Decree No. 202-08, Article 227, paragraph II. WT/TPR/S/207/Rev.1 Trade Policy Review 
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(4) MANUFACTURING  
54. The manufacturing sector is characterized by a very marked duality.  It comprises a domestic 
market-oriented sector and another sector that operate s under the free zone regime and, inasmuch as it 
sells most of its output abroad, is still the lead ing exporter of goods from the Dominican Republic.  
Even though some sectors that operate in fr ee zones have turned in a dynamic performance 
since 2001, textiles and clothing, which remain domin ant, have found it difficult to adjust to a more 
competitive global environment.  Moreover, poor inte gration between free zone operators and the rest 
of the economy has been an obstacle to the development of an efficient industrial base. 
(i) Sector outside the free zone regime 
55. In the manufacturing sector that operates outside the free zone regime real value added 
increased at an annual average rate of 4.3 per cent between 2001 and 2007 (Table IV.2).  However, 
the sector's contribution to GDP shrank from 21.5 per cent to 19.7 per cent during the same period, 
thus continuing the declining trend noted in th e Secretariat report prepared for the Dominican 
Republic's previous trade policy review.  The main activity is the production of beverages and tobacco 
products. 
Table IV.2  
Value added in the manufacturing sector (excluding free zones), 2001-2007  
 2001 2002 2003 2004 2005 2006 2007 
Total:        
 in millions of 1991 RD$ 48,148.9 50, 944.6 51,272.4 51, 904.7 55,862.2 59, 072.9 61,915.9 
 as a percentage of GDP 21.5 21.5 21.7 21.6 21.3 20.4 19.7 
As a percentage of the total: 
 Milling industry products 1. 2 1.1 0.9 0.9 0.9 0.9 0.9 
 Sugar 3.3 2.6 2.6 2.7 2.3 2.2 2.1 
 Beverages and tobacco products  14.0 13.7 14.3 14. 1 14.6 13.9 12.4 
 Oil refinery products 2.2 2.1 1.6 1.5 1.4 1.3 1.0 
 Other manufacturing industries 79.3 80.4 80.5 80.7 80.8 81.6 83.5 
Source : Information on line from the Central Bank of the Dominican Re public, "Economic st atistics:  real sector".  Viewed 
at:  http://www.bancentral.gov.do/e stadisticas.asp? a=Sector_Real. 
56. The policy seeks to achieve "greater diversif ication of domestic industry, industrial 
concatenation…and link-up with international markets".75  Under Law No. 392-07 the Industrial 
Promotion Corporation is replaced by the Centro de Desarrollo y Competitividad  – PROINDUSTRIA 
(Development and Competitiveness Centre) as the pub lic entity responsible for promoting industrial 
competitiveness. 
57. The sector receives support through tariffs and incentives (Chapter III(2)(iv) and (4)). 
(ii) Free zones 
58. The free zone regime comprises assistance for companies that operate under that regime, 
mainly through tax concessions, some of which may include export subsidies (Chapter III(3)(iv)).  
The Ministry of Finance calculates the values of th e concessions granted in 2008 under the free zone 
regime at RD$10,160 million (some US$307 million).76 
                                                      
75 Law No. 392-07 on competitiveness and industrial innovation, of 4 December 2007. 
76 Draft Budget and Law on Public Expenditure  2008.  Viewed at:  http://www.stp.gov.do/ 
presupuestos/libro_2008/libro_2008.html. The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 87 
 
 
59. In the context of the Dominican Republic's pr evious trade policy review, Members agreed 
that the free zone regime had performed an important role in promoting exports.77  However, 
Members noted that the regime was creating structur al distortions that might undermine the prospects 
for future growth. 
60. The value added in the free zones represents about one fifth of the value added in the 
manufacturing sector operating outside them (Table IV.3).  However, the free zones make a significant contribution to exports.  Moreover, they  have attracted consider able amounts of foreign 
investment.  At the end of 2007, there were 53 free zones with 526 en terprises employing about 
128,000 people.  Free zone exports amounted to about US$4,679 million in  2006, approximately 
71 per cent of total exports of goods from the Dominican Republic.
78 
Table IV.3  
Principal indicators relating to free zones, 2001-2007 
 2001 2002 2003 2004 2005 2006 2007 
Number of free zones 51 53 54 58 57 56 53 
Number of enterprises 512 520 531 569 556 555 526 
Number of employees 175,078 170,833 173,367 189,853 154,781 148,411 128,000 
Value added:        
 in millions of 1991 RD$ 11,119.2 11,237.2 11,476.8 12,357.6 12,474.1 11,482.0 10,338.3 
 as a percentage of GDP 5.0 4.7 4.8 5.2 4.8 4.0 3.3 
Imports (in millions of US$) 2,826.4 2,600.3 2,530.9 2,519.9 2,503.1 2,615.1 2,528.2 
Exports:        
 in millions of US$ 4,481.6 4,317.3 4,406.8 4,685.2 4,749.6 4,678.8 4,562.9 
 as a percentage of the free zone total:        
 Textiles and clothing 51.6 51.6 49.8 45.3 40.1 37.1 30.0 
 Footwear 6.2 4.7 4.6 5.0 6.6 5.9 5.8 
 Electronic products 10.2 11.6 13.1 13.5 14.7 14.9 16.6 
 Tobacco products 7.3 7.0 6.5 6.6 7.0 7.8 8.6 
 Medical and pharmaceutical products 6.8 7.4 7.3 6.2 6.0 6.3 7.4 
 Jewellery 8.9 10.1 10.6 12.8 12.7 13.4 14.5 
 Other products 9.0 7.7 8.1 10.7 12.8 14.7 17.2 
 As a percentage of total goods exports 84.9 83.6 80.6 78.9 77.3 70.8 63.0 
Source : WTO Secretariat, on the basis of data provided by the authorities. 
61. The total accumulated investment of enterprises established in free zones amounts to 
US$2,472 million.79  About two thirds is foreign capital.  The main foreign investor is the 
United States, with 47 per cent of total accumulated investment. 
62. Several sectors that operate in the free zones have performed strongly since 2001, including 
jewellery, electrical and telecommunications equipmen t and medical instruments.  On the other hand, 
the textile and clothing sector, which in 2006 accounte d for 53 per cent of value added, 35 per cent of 
exports and 54 per cent of employment in the fre e zones, has contracted.  Although it remains 
dominant, between 2001 and 2006 real value adde d in this sector declined by 13 per cent, 
employment by 35 per cent and exports by 30 per cent.  The share of made-up clothing from the 
                                                      
77 WTO (2002). 
78 Data provided by the Central Bank of the Dominican Republic. 
79 National Council for Export Free Zones (2006). WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 88 
 
 
Dominican Republic in the United States, its main market, fell from 4 per cent in 2000 to 2.1 per cent 
in 2006.80 
63. It is estimated that labour pr oductivity in the textile and cl othing sector, measured as value 
added per employee, increased at an annual averag e rate of 6.5 per cent between 2001 and 2006, as 
compared with 4 per cent in  the free zones as a whole.81  To a large extent, this may reflect the 
adjustments made in response to  the increased international competition that resulted from the 
elimination of the quantitative import restrictions  maintained under the Agreement on Textiles and 
Clothing. 
64. The Dominican Republic's free zone regime appears to have contributed to a limited extent to 
domestic industrial development.  The proportion of inputs from companies that operate outside the 
free zone regime in free zone exports does not sh ow any clear trend during the last decade, having 
oscillated between 8 and 12 per cent.82  A survey of 32 enterprises operating in the free zones revealed 
that they purchased 16 per cent of their inputs on the domestic market.83 
(5) SERVICES  
(i) Multilateral and preferential commitments 
65. The Dominican Republic undertook specific commi tments in 60 of the 160 sectors covered by 
the General Agreement on Trade in Services (GATS) (T able AIV.1).  It also signed the Protocols to 
the GATS on financial services and telecommunications.  There is a noticeable difference between its multilateral commitments and the legal regime applie d, which is much more open as a result of the 
major reforms in various sectors adopted in recent years.  The Dominican Republic could make its 
legal regime even more secure and stable by extending its multilateral commitments into excluded 
sectors and modifying its current commitments so as more closely to reflect the regime applied.  The expansion of its multilateral commitments would al so narrow the broad gap that has opened up 
between these commitments and the obligations  assumed under the Dominican Republic-Central 
America-United States Free Trade Agreement (DR-CAFTA). 
66. The horizontal WTO commitments include require ments for the authorization and registration 
of foreign investment and limitations on the remittanc e of profits abroad.  There are also prohibitions 
on the acquisition of land located on the coast or more than 5,000 m
2 in area, unless authorized by the 
President.  Not more than 20 per cent of employees may be foreign nationals. 
67. Within the context of the Doha Round ne gotiations on services, the Dominican Republic 
submitted an initial offer in October 200 4 and a revised one in January 2005. 
68. Within the DR-CAFTA framework, the Do minican Republic has undertaken broad 
commitments on trade in services.  The free-tr ade agreements with the members of the 
Central American Common Market (CACM) and the Caribbean Community (CARICOM) contain 
                                                      
80 Ministry of the Economy, Planning and Development (2007). 
81 Calculations by the WTO Secretariat using data contained in on line information from the Central 
Bank of the Dominican Republic, "Economic statistics: real sector" (viewed at:  
http://www.bancentral.gov.do/estadis ticas.asp?a=Sector_Real) and Ministry of the Economy, Planning and 
Development (2007). 
82 WTO Secretariat calculations.  The difference be tween free zone net exports and value added was 
used as an indicator of domestic procurement. 
83 OTF Group (2007). The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 89 
 
 
provisions on trade in services.  However, these pr ovisions are not being applied, since the parties 
have not defined the respec tive conditions and limitations. 
69. Services accounted for about 52 per cent of GDP in 2007, about 3 percentage points more 
than in 2001.84  The increase in the contribution of ser vices to GDP partly reflects the dynamic 
performance of the communications sector.  Some 60  per cent of the economically active population 
works in the services sector.85  The Dominican Republic has recorded  a growing surplus in its balance 
of trade in services (see Chapter I). 
(ii) Telecommunications 
70. The telecommunications sector is one of the most dynamic in the Dominican economy.  
Driven by the recent economic recovery and large i nvestment flows, the sector has grown strongly in 
the last five years and is contributing about 14 per cent to GDP.  This vigorous growth has been 
achieved within the context of serious efforts to modernize the sector's regulatory framework. 
(a) General characteristics 
71. Since the Dominican Republic's last trade polic y review, the telecommunications market has 
undergone rapid expansion.  During the period 2002-2007,  the sector's value added grew at an annual 
average rate of 19.8 per cent, while its contribu tion to total GDP increased from 8.0 per cent to 
13.7 per cent.86  The telecommunications sector is also  one of the Dominican Republic's main 
recipients of foreign direct investment (F DI).  From January 2004 to June 2008, the 
telecommunications sector received FDI flows amounting to approximately US$1,500 million.87 
72. Between 2002 and 2007, the total number of  telephone lines (fixed and mobile) rose from 
2.6 to 6.4 million, with a total teledensity (number of lines per 100 inhabitants) of 65.8 per cent at the 
end of 2007 (the index stood at 28.9 per cent in 2002).  The marked expansion of the telephony 
market is due to the boom in mobile lines, the numbe r of which increased at an annual average rate of 
22.7 per cent during the period 2002-2007, to reach 5.5 million.  During the same period, mobile 
teledensity rose from 18.8 per cent to 56.5 per cent (t he average for Latin America is 66 per cent).  
For its part, the number of fixed lines fell from 908,957 in 2002 to 906,485 in 2007, due to the 
replacement of fixed lines by mobile ones.88  Fixed teledensity in 2007 was 9.3 per cent, which is 
below the Latin American average (17 per cent). 
73. Like mobile telephony, the Internet access ser vices market has expanded rapidly in recent 
years.  The number of Internet accounts has more than tripled, rising from 82,518 in 2002 to 264,284 in 2007, which led to an increase in the Internet pe netration index from 6.9 pe r cent to 17.2 per cent in 
                                                     
 
84 The Central Bank data on services do not cover construction.  On line information from the Central 
Bank of the Dominican Republic: "Economic st atistics: real sector".  Viewed at:  
http://www.bancentral.gov.do/estadis ticas.asp?a=Sector_Real.  Services  do not include construction. 
85 On line information from the Dominican Central Bank, "Economic statistics: labour market".  
Viewed at:  http://www.bancentral.gov.do /estadisticas.asp?a=Mercado_de_Trabajo. 
86 The data relate to the "communications" sector which includes voice telephone services;  
packet-switched data transmission services;  telegraph services;  facsimile services ;  private leased circuit 
services;  connection and interconnection services; paging services; and maritime and air-ground mobile 
telecommunications services, as well as radio and televi sion cable services;  sound and images transmission 
services, on a fee or contract basis;  other communications services.  Information from the Central Bank of the 
Dominican Republic, viewed on line at:  http://www. bancentral.gov.do/. 
87 Data provided by INDOTEL.  Do not include i nvestment in television and sound broadcasting. 
88 INDOTEL data.  Viewed a t:  http://www.indotel.gob.do. WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 90 
 
 
the period 2002-2007.89  Within this market, broadband In ternet accounts (mainly ADSL) have 
increased sharply and account for 54 per cent of all Internet accounts.  During the period 2002-2007, 
the total number of Internet users increased from 621,719 to about 1.7 milli on.  Nevertheless, access 
to Internet accounts in rural areas is still limited to 1 per cent of households.90 
74. According to the authorities, increased comp etition in the Dominican telecommunications 
market has led to a trend towards a reduction in  mobile telephony and Internet service tariffs.  
However, the reduction has not been on the scale that  might have been expected given the dynamism 
of the sector, and Dominican tariffs are still relatively high compared with those of other countries in the region. 
75. In June 2008, 37 concessions for final telecommunications services, 32 for providing local 
fixed telephony, 8 for mobile telephony, 36 for nati onal and international long distance, 97 for cable 
television and 20 for Internet access had been gran ted, but not all of these concessions were in 
operation.
91  The chief operator in the telecommunicati ons market is Claro-Codetel, owned by 
América Móvil (Mexico) since 2006, which account s for about 77 per cent of the fixed telephony 
market, 49 per cent of the mobile market and 78 per cent of Internet accounts.92  O t h e r  m a j o r  
operators are TRICOM (Dominican Republic), Viva (Trilogy Partners, United States) and 
Orange Dominica (France Telecom).  The economic recovery has encouraged the telecommunications 
companies to invest in new services such as wireless broadband, Internet telephony and 
third-generation mobile telephony.93  The State does not participate in the provision of 
telecommunications services. 
(b) Legal and institutional framework  
76. The legal framework for the Dominican telecommunications sector mainly comprises the 
General Law on Telecommunications (Law No. 153-98) of May 1998 and a series of standards and regulations issued by the Instituto Dominicano de Telecommunicaciones  – INDOTEL (Dominican 
Telecommunications Institute).
94 
77. INDOTEL, established by Law No. 153-98 as a regulatory body with functional, 
jurisdictional and financial autonomy, is mandate d to ensure sustainable, fair and effective 
competition in the provision of tel ecommunications services.  Its functions include the promotion of 
investment in the sector, the supervision of ser vice providers, the management of the frequency 
                                                      
89 Idem . 
90 Idem . 
91 Idem . 
92 Idem . 
93 Viewed at:  http://totel.com.au/dominican-republic-telecommunications-research.asp. 
94 The most important recent regulations include (number of the resolution in parentheses):  General 
Regulation on the Telephone Service (105-07);  Regula tion on Service Tariffs and Costs (093-06);  Regulation 
on Separate Accounting (228-06);  Regulation on Numb er Portability (156-06);  Regulation on Free and Fair 
Competition for the Telecommunications Sector (022-059);  Regulation on Concessions, Special Registrations 
and Licences for Providing Telecomm unications Services in the Dominican Republic (129-04);  General 
Regulation on the Use of the Radio-Frequency Spectrum (128-04);  General Regulation on Interconnection for Public Telecommunications Services Networks (042-02) ;  Regulation on the Settlement of Disputes between 
Users and Providers of Telecommunications Services (124-05);  Regulation on the Telecommunications 
Development Fund (17-01 and 040-03);  Regulation on Cable Broadcasting (160-05);  Regulation on the Frequency-Modulated Sound Broadcasting Service (045-02, 093-02 and 073-04);  Regulation on the 
Amplitude-Modulated Sound Broadcasting Service (046-02 and 094-02);  and the Regulation on the 
Contribution to Telecommunications Development (98-01, 086-04 and 180-04).  Viewed at:  http://www.indotel.gob.do. The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 91 
 
 
spectrum, and dispute settlement.  INDOTEL is fi nanced from the income derived from use of the 
public radio-frequency domain and by a portion of the Contribution to Telecommunications 
Development (CDT), a 2-per cent levy applied to  the end user of telecommunications services. 
78. INDOTEL is also responsible for administering the Fondo de Desarrollo de las 
Telecommunicaciones – FDT (Telecommunications Development Fund), which was set up to finance 
telecommunications projects in low- income areas with funds from th e CDT.  In 2007, FDT resources 
amounted to RD$759 million (about US$23 million). 
79. Law No. 153-98 applies to telecommunications carrier services, final services or tele-services, 
value-added services and broadcasting services.  Th e objectives of the Law include reaffirming the 
principle of universal service, including free access to public telecommunications networks and 
services under conditions of transparency and non-di scrimination, promoting the provision of quality 
telecommunications services and competitive prices, guaranteeing the right of users to choose the service provider that suits them best, together with freedom of provision on the part of concession holders, and promoting free competition. 
80. Law No. 153-98 leaves public telecommunications service providers free to set consumer 
prices.  Nevertheless, INDOTEL can intervene in pri ce setting if it determines that the conditions are 
not such as to ensure effective and sustainable co mpetition, on the basis of the Regulation on Free and 
Fair Competition for the Telecommunications Sector and the Regulation on Service Tariffs and Costs.  
Interconnection charges are agreed freely among con cession holders, as are the tariffs for international 
services.  If the parties fail to agree, INDOTEL ca n intervene in the settin g of these charges in 
accordance with the General Regulation on Interconn ection for Public Telecommunications Service 
Networks.  The operators of public telecommunicati ons networks must allow other service providers 
to interconnect to those networks. 
81. In 2003, INDOTEL was called upon to intervene owing to lack of agreement on 
interconnection contracts between four of the ma in telecommunications concession holders.  After 
INDOTEL had issued a resolution establishing prelim inary interconnection conditions, the companies 
in question arrived at bilateral agreements which th e regulatory body found to be in conformity with 
the legislation.
95  INDOTEL has not formally investigated any possible abuse of a dominant position. 
82. Under Law No. 153-98 and the Regulation on Concessions, Special Registrations and 
Licences for Providing Telecommunications Services, providing third parties with most of these services requires a concession granted by INDOTEL.   This concession is awarded by competitive 
bidding in those cases in which a licence for th e use of frequencies allocated to public 
telecommunications services is required.  A li cence from INDOTEL is needed to use the public 
radio-frequency domain.  Companies must be estab lished on Dominican territory in order to obtain 
the corresponding concessions and licences.  There ar e no restrictions on the source of capital, except 
in the case of public broadcasting services for whic h control of the company (at least 51 per cent of 
the shares) must be in Dominican hands.  For th e provision of some services, such as public value 
added services and private telecommunications services, a concession is not required, merely 
registration with INDOTEL. 
83. The Regulation on Separate Accounting requir es companies to maintain cost accounting for 
each public telecommunications service offered on the market and to submit this information 
                                                     
 
95 The issues included network access charges (inc luding the incoming intern ational long-distance 
access charge), the interconnection of na tional Internet nodes, the access codes for prepaid services and the cost 
of acquiring pre-existing bidirecti onal facilities.  See INDOTEL Resolutio ns No. 023-03 (25 February 2003) 
and No. 051-03 (30 April 2003). WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 92 
 
 
regularly to INDOTEL, which then uses it as an analytical basis for preventing possible 
cross-subsidization and the offering of services at below cost prices.  The Regulation on Number 
Portability, which will enter into force in 2009, seek s to remove the barriers to the entry of new 
competitors and guarantee the right of users to choo se the service provider that suits them best.  The 
Dominican Republic will be one of the first Latin  American countries to apply number portability. 
84. Network unbundling is provided for in the Do minican legislation, under which service 
providers so requested must permit the shared use of subscriber loops or sub-loops which are an essential facility for public telecommunications ser vices, other than the fixed-telephony service.  
Moreover, companies must make essential-facility sub scriber loops fully available in areas in which 
they are the sole fixed-telephony service provider.
96  In actual fact, INDOTEL has not found it 
necessary to order unbundling. 
85. Within the framework of the WTO Negotiating Group on Basic Telecommunications, 
the Dominican Republic has signed the Fourth Prot ocol to the GATS, which was ratified with the 
promulgation of Law No. 153-98.  In its Schedule of Commitments, the Dominican Republic accepted the commercial presence of foreign telecommunicati ons service providers, on condition that they 
establish legal residence in Dominican territory and obtain an INDOTEL concession.
97  National 
treatment remains unbound and there are no specific commitments for modes 1 and 2.  Moreover, it 
has incorporated in its Schedule the Reference Pa per on Telecommunications, undertaking to prevent 
the main providers of telecommunications ser vices from engaging in anticompetitive practices and 
guaranteeing interconnection to public teleco mmunications networks under non-discriminatory 
conditions. 
(iii) Financial services 
(a) General considerations 
86. The banking sector has recovered from the acute crisis of 2003-2004.  The prudential 
indicators have shown a marked improvement, largel y because of the strengthening of the supervisory 
regime since the Dominican Republic's last Review.  However, the financial margin and the cost of 
credit are still high.  Foreign companies may set up in the banking sector.  The insurance law, on the 
other hand, does not allow insurance companies from countries where Dominican companies cannot 
operate to conduct business in the Dominican Republic .  Moreover, there is a ban on the cross-border 
supply and consumption abroad of various kinds of  insurance, including for the transport of import 
cargoes, and foreign insurance companies are not  allowed to set up in the Dominican Republic 
through a branch ( sucursal ).  The latter restriction should be abolished in 2011 under the DR-CAFTA 
framework. 
87. Real value added in the financial sector grew at an annual average rate of about 9 per cent 
between 2001 and 2007.98  The sector's contribution to GDP increased from 2.9 per cent to 3.4 per 
cent during the period.  The sector employs about 2 per cent of the economically active population.99 
                                                      
96 General Regulation on Interconnection for Public Telecommunications Services Networks (Board of 
Directors Resolution No. 042-02 of 7 June 2002, as amended by Resolution No. 052-02 of 18 July 2002).  
Viewed at:  http://www.indotel.gob.do. 
97 WTO documents S/GBT/W/1/Add.30 and GATS/SC/28/Suppl.2, of 12 February and 11 April 1997, 
respectively. 
98 On line information from the Central Bank of th e Dominican Republic, "Economic statistics:  real 
sector".  Viewed at:  http://www.bancent ral.gov.do/estadisticas.asp?a=Sector_Real. The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 93 
 
 
88. The Dominican Republic ratified the Fifth Protocol to the GATS in June 2003, but its 
multilateral commitments on financial services are lim ited (Table AIV.1).  The participation of 
foreign investment in the capital of the companies that provide the majority of the services in its 
Schedule of Commitments is limited to 49 per cent.  Moreover, for some deposit services, the 
establishment of financial institutions is subject to  evidence of economic nece ssity.  The preferential 
commitments on financial services within the DR-CAFTA  framework are relatively extensive.  As in 
other parts of the services sector, the regime applie d to financial services by the Dominican Republic 
and the obligations assumed under the DR-CAFTA ar e more liberal than the regime bound at the 
WTO. 
(b) Banking services 
89. At the end of 2007, the sector's assets accounted for 53 per cent of GDP, about 10 percentage 
points less than at the end of 2002.100  Approximately 82 per cent belong to 13 "full-service" banks, 
13 per cent to 17 savings and loan associations a nd the rest to 88 other financial intermediation 
institutions, including 36 finance companies and 23 savings and credit banks.101  Approximately 
26 per cent of the assets of the financial system are concentrated in one State-owned bank 
(Banreservas) and about 9 per cent in the three foreign-owned banks. 
90. Between 2003 and 2004 the sector passed through a severe crisis which was marked by the 
failure of one of the main banks and contributed to the serious difficulties that affected the economy 
in general (Chapter I).  According to the Mini ster of the Economy, Planning and Development 
"ineffective regulation and prudential supervision was a determining factor that led… to fraud and the 
crisis".102  The IMF points out that since the cris is the Dominican Republic has significantly 
strengthened its banking supervision regime and that the full implementation of risk-based 
supervision is its main challenge in this area.103 
91. The sector has recovered from the effects of th e crisis.  However, in 2007 the banks' interest 
spread was almost nine percentage points and th e weighted average nominal lending rate rose to 
15.7 per cent.104  According to the authorities, the large sp read is the result of the banking sector's 
high operating costs and minimum reserve requirement s;  they have also acknowledged that it could 
in part reflect the relatively low levels of competition in the sector. 
92. Payments made by cheque and electronic transfers of funds are subject to a selective 
consumption tax of 0.15 per cent.105  Payments of interest on loans contracted with foreign credit 
institutions are subject to a tax of 10 per cent.106 
                                                                                                                                                                     
99 On line information from the Central Bank of the Dominican Republic, "Economic statistics:  labour 
market".  Viewed at:  http://www.bancentral. gov.do/estadisticas.asp?a=Mercado_de_Trabajo. 
100 Information provided by the authorities for the purposes of this Review. 
101 The legislation defines full-service banks as "entitie s that can take instant-access, demand or current 
account deposits from the public and car ry out all types of opera tions, including within the general catalogue of 
activities established in…this Law".  Law No. 183-02 of 21 November 2002 approving the Monetary and 
Financial Law, Article 36. 
102 Montás, J. T. (undated). 
103 IMF (2008). 
104 The interest spread was calculated from the diff erence between the weighted nominal lending and 
borrowing rates of the full-service banks.  See on lin e information from the Central Bank of the Dominican 
Republic, "Economic statistics:  monetary and financia l sector".  Viewed at:  http://www.bancentral.gov.do/ 
estadisticas.asp?a=Sector_ Monetario_y_Financiero. 
105 Law No. 11-92 approving the Tax Code of the Dominican Republic, Article 382. 
106 Ibid., Article 306. WT/TPR/S/207/Rev.1 Trade Policy Review 
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93. The Dominican Republic is assessing a draft law to create a "financial free zone" through 
which financial services would be offered to non-resi dent natural persons and legal persons with their 
head offices abroad. 
94. Policy formulation in the banking sector is the responsibility of the Monetary Board, 
consisting of the Governor of the Central Bank, the Minister of Finance, the Superintendent of Banks 
and six other members appointed by the President of the Republic for renewable two-year periods.107  
The Superintendency of Banks is the supervisory authority and in performing this function may issue 
regulations.108  The Central Bank is responsible for payment system "oversight and final 
settlement".109 
95. Since its last Review, the Dominican Republic has introduced major reforms in the sector's 
legal framework.  In November 2002, the Gene ral Banking Law of 1965 was replaced by the 
Monetary and Financial Law.110  Likewise, various regulations have been adopted to strengthen 
oversight, including rules on asset evaluation, capital ad equacy, loans to related parties, consolidated 
oversight, market and liquidity risks, publication of financial statements, risk concentration and 
corporate governance.  The authorities note that these rules reflect international best practice. 
96. Full-service banks and non-financial enterprises established in the Dominican Republic can 
obtain loans from foreign banks or make deposits in those banks.111  Cross-border capital flows are 
not subject to authorization or registration require ments.  Banks without a commercial presence in the 
Dominican Republic may not promote their products. 
97. Foreign banks may establish subsidiaries, branches ( sucursales ) and representative offices in 
the Dominican Republic.112  The capital and reserves that fore ign banks assign to their branches in 
compliance with the regulations must be held in the Dominican Republic.113  The minimum amount 
required to open a subsidiary or branch of a fu ll-service bank at the end of 2007 was RD$163 million 
(about US$4.9 million); this applies to both  foreign-capital and do mestic-capital banks. 
98. The legislation does not restrict foreign capita l participation in banks.  The acquisition of 
more than 30 per cent of the paid-up capital of a ba nk by domestic or foreign investors is subject to 
authorization by the Monetary Board.114  The acquisition by investors of between 3 and 30 per cent of 
the paid-up capital of a bank depends on the S uperintendency of Banks  having "no objection".115  The 
legislation does not specify any time limit for the re gulator to object.  According to the authorities, 
since 2002 there have been seven applications for the authorization of share transfers from foreign 
investors.  Of these three were approved and four rejected for non-compliance with the regulations.  
Investments amounting to less than 3 per cent of a bank's paid-up capital must be notified to the 
Superintendency of Banks. 
                                                      
107 Law No. 183-02, Articles 9-11. 
108 Ibid., Article 19. 
109 Ibid., Article 15. 
110 Law No. 183-02. 
111 Article 36 of Law No. 183-02 defines full-service banks as "those entities that can take 
instant-access, demand or current account deposits fr om the public and carry out all types of operations, 
including within the general catalogue of activ ities established in Article 40 of this Law". 
112 Law No. 183-02, Article 39.  The Law uses the term " filial " to refer to subsidiaries. 
113 Ibid., Article 38. 
114 Regulation on the opening and operation of financial intermediation institutions and representative 
offices, Articles 14 and 31. 
115 Ibid., Article 15. The Dominican Republic WT/TPR/S/207/Rev.1 
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99. The legislation does not place any restricti on on the number of banks operating in the 
domestic market.  The Superintende ncy of Banks must authorize the opening and closing of branch 
offices ( agencias ), irrespective of the source of the cap ital of the bank to which they belong.116  The 
services which banks may offer are set out in Law No. 183-02 and do not vary with the source of their 
capital.117  In general, banks require the authorizatio n of the Superintendency of Banks to obtain 
liquidity in the domestic securities market.118 
100. The authorization of the Monetary Board is n eeded to operate a bank.  The Monetary Board 
must first consult the Superintendency of Banks.119  The criteria for evaluating applications for 
authorization are laid down in the Regulation on the opening and operation of financial intermediation 
institutions and representative offices.120   These criteria are similar for domestic and foreign 
investors, except that the authorities must satisfy  themselves that the su bsidiaries or branches 
(sucursales ) of the foreign banks have received the authorization of the parent company and its 
supervisory body to set up in the Dominican Republic .  Likewise, the authorities must verify that the 
Superintendency of Banks has, or can sign, a c ooperation and information ex change agreement with 
the parent company's regulatory body.  The legisl ation does not specify a maximum period for the 
Monetary Board to rule on an application for authorization.  According to the authorities, two 
applications from foreign banks have been receive d since Law No. 183-02 came into force and both 
were approved. 
101. Full-service banks may invest up to 20 per cent of  their paid-up capital in "support and related 
services entities".121  They may also invest up to 10 per cent of their paid-up capital in non-financial 
enterprises, including insurance companies, provide d that the bank does not become the owner of 
more than 10 per cent of the paid-up capital of th e non-financial enterprise.  They may not invest 
more than 20 per cent of their paid-up capital in foreign financial entities, including their branches 
(sucursales ) or representative offices.  
102. The deposits of banks established in the Domi nican Republic, irrespective of the source of 
their capital, are guaranteed up to RD$500,000 (about US$15,120).122  However, the authorities have 
pointed out that if there were a systemic risk, th e deposits would be totally guaranteed.  The banks are 
free to determine interest rates and the charges for their services, although they are required to publish 
them. 
(c) Insurance services 
103. The sector's assets amounted to about RD$20,36 8.1 million in 2007 (some US$616 million), 
equivalent to 1.5 per cent of GDP.123  Life insurance premiums amounted to about 
RD$2,056.4 million in 2007 (US$62.2 million), and general insurance premiums to 
RD$17,056.2 million (US$515.7 million).  There are 35 insurance companies operating in the 
Dominican Republic, of which 29 are domestic-cap ital and the rest foreign-capital institutions. 
                                                      
116 Law No. 183-02, Article 35. 
117 Articles 40, 42 and 43. 
118 Law No. 183-02, Article 44. 
119 Ibid., Article 35. 
120 Article 21. 
121 Law No. 183-02, Article 41. 
122 Article 64. 
123 Data provided by the authorities. WT/TPR/S/207/Rev.1 Trade Policy Review 
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104. The Ministry of Finance is responsible for formulating insurance sector policy.124  T h e  
Superintendency of Insurance is the supervisory b ody and in the course of performing this function 
may issue regulations.125  In September 2002, the Dominican Republic reformed the legal framework 
through Law No. 146-02. 
105. Under Article 21 of Law No. 146-02, authorizati on to operate in the Dominican Republic may 
not be granted to insurance or reinsurance compan ies "owned by companies organized in accordance 
with the laws of other countries in which Domi nican companies are not allowed to operate". 
106. Law No. 146-02 prohibits the cross-border s upply or consumption abroad of certain 
categories of insurance, including: life and health ;  property situated in the Dominican Republic;  
ships' hulls, aircraft and motor vehicles licensed in the Dominican Republic; and the transport of 
import cargo.126  Foreign reinsurance companies may o ffer their services without needing to be 
established in the Dominican Republic, provided that they have authorization from the Superintendency of Insurance.
127  The requirements for obtaining authorization are set out in 
Law No. 146-02, which also specifies a period of 30 days for the Superintendency to rule on an application.
128  According to the authorities, there are 59 reinsurance companies which, although not 
established in the Dominican Republic, have r eceived authorization to offer their services. 
107. Foreign insurance companies may set up subs idiaries in the Dominican Republic, but not 
branches ( sucursales ).129  All insurance companies established in  the Dominican Republic must be set 
up in the form of a joint-stock or public limited company.  Under the Free Trade Agreement between 
the Dominican Republic, Central America and th e United States, the Dominican Republic has 
undertaken to permit the establishment of branches of foreign insurance companies by March 2011 at 
the latest.  Within the context of this Review, th e authorities have indicated that the possibility of 
establishing branches would be exte nded to all foreign enterprises. 
108. The legislation does not restrict the participa tion of foreign capital in insurance companies, 
nor does it impose limits on the number of insuran ce companies that may operate in the Dominican 
Republic, or on the number of branch offices ( agencias ).  The legislation does not differentiate 
between the kinds of services that domestic- and fo reign-capital insurance companies may offer.  The 
same company may offer general and personal insurance.130 
109. To operate an insurance company it is neces sary to obtain the authorization of the 
Superintendency of Insurance.131  The requirements for obtaining authorization are set out in 
Law No. 146-02 and do not vary with the source of the capital, except that the foreign company's 
regulatory body must certify that "it is organized  and operates in accordance with the law and is 
authorized to carry out the operations corresponding  to the branches of insurance mentioned in its 
application".132  Likewise, foreign insurance companies must  have operated in their jurisdiction of 
origin for more than five years.  According to the authorities, none of the applications for 
authorization received has been rejected. 
                                                      
124 On line information from the Ministry of Fi nance, "Functions and powers".  Viewed at:  
http://www.finanzas.gov.do/la_institucion/funtions.html. 
125 Law No. 146-02 of 9 September 2002 on insurance and bonds, Article 235. 
126 Article 6. 
127 Law No. 146-02, Article 23. 
128 Articles 23 and 24. 
129 Law No. 146-02, Article 13. 
130 The forms of insurance covered by each category are specified in Article 10 of Law No. 146-02. 
131 Law No. 146-02, Articles 12 and 13. 
132 Ibid., Article13. The Dominican Republic WT/TPR/S/207/Rev.1 
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110. Law No. 146-02 leaves insurance companies free to set their premiums.133  However, it 
requires the formulation of minimum technical pa rameters that allow the Superintendency of 
Insurance to evaluate the premiums.134  According to the authorities, these parameters have not been 
defined.  Civil liability insurance is compulsory for "motor vehicles and trailers".135  The premiums 
that may be charged by companies that sell such  insurance are contained in a resolution of the 
Superintendency of Insurance.136 
(iv) Air transport and airports 
111. The Dominican Republic updated the legal framewo rk for the air transport sector in 2006.  
There are 31 bilateral air transport instruments wh ich generally grant, in addition to other basic 
freedoms, the right to carry passengers between the counterparty country and a third country on 
flights originating in the Dominican Republic (fift h freedom).  Cabotage is reserved for companies 
which have a minimum of 51 per cent domestic cap ital and are under the "effective control" of 
Dominicans;  foreign participation in Dominican companies that provide international services is 
restricted to 65 per cent.  The legislation does not  impose any limitations on the foreign ownership of 
public airports or on their operation by foreign enterprises. 
112. In 2007, some 6.7 million passengers were ca rried on scheduled flights and 2.3 million on 
charter flights.137  The Dominican Republic does not maintain a register of the volume of cargo 
transported by air. 
113. The airports of Santo Domingo (Las Américas) and Punta Cana handle about 75 per cent of 
the passengers carried on scheduled flights.  The main  airports for charter flights are Punta Cana and 
Puerto Plata.  The main airports for freight are Las Américas and Santiago.  Aerodom (Aeropuertos 
Dominicanos Siglo XXI, S.A.) operates six international airports, including Las Américas, under a 25-year "build-operate-transfer" concession.  Ae rodom is a consortium with foreign participation 
controlled by Dominican investors; a subsidiary  of Vancouver International Airport Authority 
operates all Aerodom's airports unde r an operation and administration agreement.  The State extended 
the term of Aerodom's concession from 20 to 25 years in 2001.  The other three international airports, 
including Punta Cana, are in private Dominican ownership. 
114. In mid-2008, there were three domestic airlines certified to provide an international air 
transport service.  Eight domestic airlines have certificates to offer a cabotage air service. 
115. The World Bank has pointed out that the charges that users of the Dominican Republic's 
airports have to contend with are relatively high.
138  On the other hand, the same study notes that air 
transport costs appear to be lower than in several other countries of the Americas. 
116. Within the framework of its multilateral commitments, the Dominican Republic has 
undertaken not to impose limitations on cross-border supply, consumption abroad or investment with 
respect to maintenance and repair services for trans port equipment, including aircraft (Table AIV.1). 
                                                      
133 Article 89. 
134 Article 91. 
135 Law No. 146-02, Article 112. 
136 Superintendency of Insurance Resolutio n No. 010-2002 of 26 December 2002. 
137 On line information from the Dominican Civil Aviation Institute, "Aviation statistics".  Viewed at: 
http://www.idac.gov.do/estad isticas/estadisticas.html. 
138 World Bank (2005b). WT/TPR/S/207/Rev.1 Trade Policy Review 
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117. The Dominican Republic updated the sector's le gal and institutional framework by enacting 
Law No. 491-06, in force since the end of 2006.139  The Law created the Instituto Dominicano de 
Aviation Civil  – IDAC (Dominican Civil Aviation Institu te) and updated safety standards.  The 
formulation of air transport policy is the responsibilit y of the Civil Aviation Board, which consists of 
various government entities and repres entatives of the private sector.140  The IDAC is an autonomous 
public body entrusted with the supervision of the sector.141 
118. Companies established abroad can provide in ternational air transport services in the 
Dominican Republic under the corresponding intern ational agreements.  In the absence of an 
agreement, the provision of international air trans port services is subject to the "principle of fair 
reciprocity"142, unless the Civil Aviation Board consider s that special circumstances prevail.143 
119. The Dominican Republic has signed 31 air transpor t instruments with:  Antigua and Barbuda, 
Argentina, Austria, Belgium, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba, El Salvador, 
France, Germany, Guatemala, Haiti, Hungary, Is rael, Italy, Jamaica, Mexico, Netherlands, 
Netherlands Antilles, Panama, Portugal, Russia, Spai n, Trinidad and Tobago, United Arab Emirates, 
United Kingdom, United States and the Bolivarian Republic  of Venezuela.  It has also signed the Air 
Transport Agreement between the Member and Asso ciate Member States of the Association of 
Caribbean States.  From the standpoint of passenge r traffic volume, the most significant bilateral 
agreement is that between the Domi nican Republic and the United States. 
120. All the bilateral instruments signed by the Domi nican Republic establish the third and fourth 
freedoms, in accordance with the Chicago Conv ention of 1944, and most also establish the 
fifth-freedom passenger traffic right.  According to the authorities, the Dominican Republic has 
granted sixth-freedom passenger traffic and seventh-fr eedom freight traffic rights to Chile, Colombia 
and Mexico.  The authorities note that in almost all th e bilateral instruments the refusal clause is based 
on the criterion of majority ow nership and effective control.144  Moreover, they have indicated that 
most of the instruments do not limit the volume of tra ffic, the frequency of the service or the type of 
aircraft that the airlines can use. 
121. Cabotage air transport (eighth-freedom traffic right) is reserved for companies that meet the 
following requirements:  at least 51 per cent of th eir capital belongs to Dominican nationals;  their 
head office is situated in the Dominican Republic;  and at least 35 per cent of their board of directors 
and two thirds of their "executive personnel" are Dominican nationals.145  Moreover, the companies 
must maintain "effective control" of their fleet and their air crews must be Dominican.146  However, 
they may employ foreign technical experts if th ere are no duly qualified Dominican nationals but only 
for the time needed to train the latter.147  Domestic companies that only offer international air 
transport services must meet the same essential requirements as the providers of cabotage services, except that foreign participation in their capital may be as much as 65 per cent.
148 
                                                      
139 Law No. 491-06 on Civil Aviation. 
140 Ibid., Article 205. 
141 Ibid., Article 26. 
142 Ibid., Article 218. 
143 See, for example, Articles 221 and 235 of Law No. 491-06. 
144 The term "refusal" encompasses the criteria that  determine the revocation of authorizations to 
exploit traffic rights. 
145 Law No. 491-06, Articles 237 and 239. 
146 Ibid., Article 120. 
147 Ibid., Article 121. 
148 Ibid., Article 237. The Dominican Republic WT/TPR/S/207/Rev.1 
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122. Foreign companies must obtain an operating licence issued by the Civil Aviation Board.149  
These licences are granted for specified routes.  Applicants must show that they have the 
authorization of their country's aviation authoriti es to operate the corresponding international service 
and that their State of origin is prepared to affo rd reciprocal treatment to Dominican companies.  
Applicants must be domiciled in the Dominican Re public and appoint an agent to represent them.  
Operating licences are non-transferable and are grante d for renewable periods of up to ten years.  
According to the authorities, 49 operating licences ha ve been granted since 2001 and none has been 
refused. 
123. The legislation does not impose any limitations on the number of providers of computerized 
reservation systems, or on the number of travel agencies which the providers of these systems may 
service.  Providers of computerized reservation systems do not need to be established in the Dominican Republic to offer their services.  Foreig n airlines may promote and sell their products in 
the Dominican Republic, provided that they have an  operating licence from the Civil Aviation Board.  
There are no restrictions on the number of sales outlets. 
124. According to the authorities, Dominican-register ed aircraft may be maintained in a foreign 
workshop, provided that the workshop has a certifi cate issued by the civil aviation authority of a 
Member State of the International Civil Aviation Or ganization and recognized or authenticated by the 
IDAC.  The requirements for workshops located abroad are listed in the Dominican Aviation 
Regulations.
150 
125. The legislation does not impose any limitations on foreign ownership of public airports or on 
their operation by foreigners.  Nor does it limit foreign supply of passenger and aircraft ground 
support services. 
(v) Maritime transport and ports 
126. Maritime transport plays an essential role in the Dominican Republic's international trade.  
Although the supply of cabotage maritime transport services is, in principle, restricted to Dominican-registered vessels, foreign vessels may pr ovide such services on a provisional basis.  The 
legislation provides for a discount on certain ta riffs relating to port services for Dominican-flag 
vessels.  There are no limitations on foreign capital participation in port operation. 
127. Approximately 90 per cent of the Dominican Re public's foreign trade volume is transported 
by sea.  In 2007, the volume of cargo handled by Dominican ports amounted to 23.6 million tonnes.
151  
That same year, about 385,000 passengers a rrived in the Dominican Republic by sea. 
128. The Dominican Republic has 14 main ports.  The ports of Caucedo and Rí o Haina, both in the 
neighbourhood of Santo Domingo, handle 72 per cent of the total cargo volume.152  Most container 
traffic passes through Caucedo.  The main  passenger ports are La Romana, Samaná and 
Santo Domingo.  The ports of Caucedo and La Romana  are privately owned;  the other five have been 
granted on concession to private companies.  Most of the providers of maritime transport support 
services are private companies, some with foreign capital. 
                                                      
149 Ibid., Article 240. 
150 Dominican Aviation Regulations (No. 145), Section 145.51. 
151 Information provided by the authorities. 
152 On line information from the Dominican Port Authority, "Statistics".  Viewed at:  
http://www.apordom.gov.do/estadistica.pdf. WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 100 
 
 
129. According to the authorities, the Dominican Repub lic applies the International Ship and Port 
Facility Security Code.  The port of Caucedo partic ipates in the Container Security Initiative (CSI), 
which is administered by the United States Cust oms and Border Protection Service, and in the 
Business Alliance for Secure Commerce, a privat e initiative aimed at promoting trade security. 
130. The Dominican Republic does not have a national merchant fleet.  The authorities have said 
that they have no figures on maritime transport costs in the Dominican Republic. 
131. The Dominican Republic has not undertaken a ny commitments with respect to maritime 
transport under the GATS (Table AIV.1).153 
132. The Autoridad Portuaria Dominicana  – APORDOM (Dominican Port Authority) implements 
port policy and is authorized to put out ports on concession to private companies.  It supervises the 
operation of ports that have been put out on concession and operates the rest.154  T h e  
Dominican Republic's National Systemic Competitiveness Plan recommends that the APORDOM functions be reformed so as to involve only supervision of the port system.
155 
133. The legislation does not restrict the number of providers of scheduled or non-scheduled 
international maritime transport services in the Dominican Republic.  Companies providing 
international maritime transport services that ar e not domiciled in the Dominican Republic must 
appoint a shipping agent to represent them.  Th ere are no institutional cargo allocation systems. 
134. Cabotage maritime transport services are reserved for Dominican-flag vessels.156  However, if 
the service cannot be provided by a Dominican-flag vessel, the Admiralty may order the provisional registration of a foreign-flag vessel under the Dominican  flag to enable it to provide that service.  No 
limits are imposed on the participation of foreign capital in Dominican-flag vessels.  The owners of 
these vessels must be established in the Dominican Republic. 
135. The tariffs for international maritime tran sport services are not subject to government 
approval.  The Dominican Republic has no provisions on maritime conferences. 
136. Law No. 70 authorizes APORDOM to grant concessions for the operation of ports and the 
supply of port services.
157  The legislation does not impose any restrictions on the participation of 
foreign capital in concession-holding companies.  Law No. 3003 prohibits foreign-flag vessels from 
carrying out "towing, passenger transport and lo ading or unloading operati ons within the ports".158  
The authorities note that, in practice, as there is  no national merchant fleet, foreign vessels can 
provide these services. 
137. The Government fixes the fees for port servi ces.  Dominican-flag vessels that carry out 
loading or unloading operations receive a 50 per cent discount on fees for the "use of port facilities or 
demurrage service".159  Moreover, Dominican-flag vessel s are exempt from berthing charges.160 
                                                      
153 WTO document GATS/SC/28 of 15 April 1994. 
154 Law No. 70 of 17 December 1 970 establishing the Dominican  Port Authority, Article 4. 
155 National Competitiveness Council (undated). 
156 Law No. 3003 of 12 July 1951 on the port and coastal police, Article 56. 
157 Law No. 70, Article 8. 
158 Article 56. 
159 Decree No. 612-05 of 2 November 2005. 
160 Decree No. 519-02 of 5 July 2002, Article 3, paragraph IV. The Dominican Republic WT/TPR/S/207/Rev.1 
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(vi) Professional services 
(a) General considerations 
138. In the Dominican Republic, to practise in an y profession considered to involve risk, both 
Dominican and foreign professionals must obtain a permit ( exequátur ) granted by presidential decree;  
professionals holding foreign diplomas must have them accredited in order to be able to practise in the 
Dominican Republic.  Foreign architects and engineers hired to exercise their professions temporarily in the Dominican Republic are not subject to these requirements;  nor do foreign lawyers with a 
licence from a jurisdiction that allows Dominican la wyers to practise need to have their diploma 
endorsed.  Other restrictions are imposed on the exerci se of professions by foreigners in certain areas 
of accountancy, legal services, and engineering and architecture. 
139. Within the framework of the GATS, the Do minican Republic has undertaken commitments 
with respect to various categories of professiona l services, including: legal advisory, financial 
auditing, tax preparation and revi ew, management consulting, arch itectural and engineering, and 
advertising services (Table AIV.1).  The services disciplines of the DR-CAFTA cover professional services. 
140. There are nine professional bodies established by law:  Colegio de Abogados  (College of 
Lawyers);  Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores  (Dominican College of 
Engineers, Architects and Surveyors);  Colegio de Psicólogos  (College of Psychologists);  Colegio 
Médico Dominicano  (Dominican Medical Association);  Colegio de Profesionales de Laboratorios 
Clínicos (College of Clinical Laboratory Professionals);  Colegio de Periodistas (College of 
Journalists);  Colegio de Notarios  (College of Notaries);  Colegio Dominicano de Contadores 
Públicos Autorizados  (Dominican College of Certif ied Public Accountants);  and Colegio 
Dominicano de Médicos Veterinarios  (Dominican College of Veterinarians).  The professional bodies 
oversee the exercise of their respective professions and, in general, have disciplinary powers. 
141. Both Dominicans and foreigners may exercise a profession only if they hold an exequátur  
granted by presidential decree.
161  Law No. 111 of 1942 stipulates that this requirement extends to "all 
the professions that require a university diploma".162  The authorities have indicated that, in practice, 
an exequátur  is required to exercise professions that involve  risk, for example, engineering, law, and 
the professions relating to health and the financia l sector.  The procedure and the requirements for 
obtaining an exequátur  are publicly available.163  The body responsible fo r processing applications 
varies with the course of studies followed. 
142. Professionals with foreign academic credentials must have them revalidated in order to 
practise in the Dominican Republic.  The Universidad Autónoma de Santo Domingo  – UASD 
(Autonomous University of Santo Domingo) is the institution through which the State exercises its revalidation prerogative.  The requirements for re validating foreign diplomas are set out in the 
Regulation on revalidation, recognition of diplomas and accreditation of studies.
164  The UASD is 
authorized to revalidate foreign diplomas without fu rther testing in the case of applicants who have 
graduated from universities that grant reciprocal treatment to Dominicans under conventions signed 
                                                      
161 Law No. 111 of 3 November 1942 on the professional exequátur , Article 1. 
162 Idem . 
163 On line information from the Ministry of Higher  Education, Science and Technology, "Services for 
citizens:  exequátur  decree".  Viewed at:  http://www.seescyt. gov.do/baseconocimiento/Lists/Services%20de% 
20SEESCyT%20al%20Ciudadano/DispForm.aspx?ID=4&Source=http://wss3.seescyt.gov.do/ 
legalizaciondoc/default.aspx. 
164 University Council Resolution No. 2005-250 of 25 August 2005. WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 102 
 
 
by the Dominican Republic.165  Article 13 of the Regulation establishes the time frame for processing 
revalidations.  According to the authorities, the UASD receives about 50 applications for the 
revalidation of foreign diplomas every year, ma inly in the fields of medicine and law. 
143. Foreign professionals must obtain a "business work  visa" or "NM1 visa" to practise in the 
Dominican Republic.  The requirements for obtaining a visa are publicly available.166  O n e  o f  t h e  
requirements is for a contract of employment for a mi nimum of one year with a firm established in the 
Dominican Republic.  Visas are valid for one year and may be renewed. 
144. In general, in companies established in the Dominican Republic, 80 per cent of the employees 
who do not perform management or administra tive functions must be Dominican citizens.167  T h e  
salaries of Dominican employees must account for at least 80 per cent of the wage bill, excluding the 
salaries of employees who perform technical, executive or managerial functions.168 
(b) Accountancy 
145. Professionals must obtain an exequátur  to practise as a certified public accountant.169  
Article 9 of Law No. 633 of 1944 stipulates that in order to obtain an exequátur  as a certified public 
accountant it is necessary to hold Dominican nationality.  
(c) Legal services 
146. Foreign professionals may not offer notary services or legal services relating to the judicial 
function or appearance before the courts of the Dominican Republic.170  Foreign professionals may 
provide other legal services on condition that they are members of the Colegio de Abogados .171  
Professionals with foreign diplomas must have them revalidated in order to become members of the 
Colegio de Abogados , unless the jurisdiction under which they are licensed allows Dominican lawyers 
to practise under an agreement with the Dominican Republic.172 
(d) Architecture and engineering 
147. Professionals must register their diplomas with the Colegio Dominicano de Ingenieros, 
Arquitectos y Agrimensores  – CODIA (Dominican Association of Engineers, Architects and 
Surveyors) in order to practise as architects or engineers.173  Foreign professionals may register their 
diplomas with the CODIA only if they are licensed under a jurisdiction that allows Dominican 
architects and engineers to practise.174 
                                                      
165 Regulation on revalidation, recognition of dipl omas and accreditation of studies, Article 9. 
166 On line information from the Ministry of Foreign Affairs, "Consular and immigration 
requirements".  Viewed at:  ht tp://www.serex.gov.do/default.aspx. 
167 Labour Code, Articles 135 and 138. 
168 Ibid., Article 136. 
169 Law No. 633 of 16 June 1944 on cer tified public accountants, Article 8. 
170 Law No. 821 of 21 November 1927, Article 73, which stipulates that no-one may be appointed to 
perform any judicial function in the Republic unless he or  she is a Dominican citizen, of statutory age, of good 
repute and in full enjoyment of his or her civil rights;  and Law No. 301 of 3 February 1983 on the notary 
service, Article 5. 
171 Law No. 91 of 3 February 1983 instituting the Colegio de Abogados  of the Republic, Article 4. 
172 Idem . 
173 Law No. 6200 of 22 February 1963 on the exerci se of engineering, architecture, surveying and 
related professions, Articles 2 and 17. 
174 Ibid., Article 17. The Dominican Republic WT/TPR/S/207/Rev.1 
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148. Subject to CODIA authorization, professionals  with foreign academic credentials hired by 
firms established in the Dominican Republic may practise temporarily without requiring an exequátur , 
revalidating their diplomas or registering the latter with the CODIA.175 
149. The practice of chemical engineering is subject to additional requirements.176  T h e  
Dominican Republic maintains restrictions on the pa rticipation of foreign professionals in certain 
tourism projects (see Section (5)(vii) below). 
(vii) Tourism 
150. Tourism performs a vital functi on in generating jobs and hard currency and attracting foreign 
investment.  The sector has recovered from the slowdo wn in the early part of the decade.  There is no 
limit on foreign investment.  In principle, no licen ces are issued to foreign tourist guides and casino 
employees must be Dominican citizens.  Foreign trav el agencies and tour operators may not provide 
cross-border services unless they have a local agent.  Investors in certain tourism projects are given 
various tax incentives such as exemption from im port taxes and income tax and must employ 
Dominican professionals.  The cost of th ese incentives to the Treasury will amount to 
RD$1,066 million (some US$32.2 million) in 2008. 
151. The tourism sector accounts for about 7 per cent of GDP and employs approximately 6 per 
cent of the economically active population.177  The sector's main indicators have recovered from the 
effects of various adverse external factors that  were influential at the beginning of the decade 
(Table IV.4).  During the same period, the sector received approximately 22 pe r cent of net FDI flows 
into the Dominican Republic.178  About 32 per cent of foreign tourists come from the United States, 
followed by Canada (17 per cent), France and Spain (8  per cent each).  Although the State owns some 
hotels, its participation in the provision of lodging services is very limited. 
152. Under the GATS, the Dominican Republic comm itted itself to not imposing limitations on 
foreign investment in hotel and restaurant services or on cross-border supply and foreign investment 
in motor vehicle rental services (Table AIV.1).  Fo reign investment in travel agency, tour operator 
and tourist guide services is guaranteed market a ccess but not national treatment;  full commitments 
have been undertaken with regard to the cross-border supply of such services. 
Table IV.4 
Tourism sector indicators, 2001-2007 
 2001 2002 2003 2004 2005 2006 2007 
Number of international tourist arrivals 
(thousands) 2,882 2,811 3,282 3,450 3,691 3,965 3,980 
 Non-resident foreigners (thousa nds) 2,395 2,309 2,759 2,873 3,088 3,342 3,398 
 Non-resident Dominicans (thousands) 487 502 524 578 603 623 581 
Hotel capacity (units) 54,034 54,730 56,378 58,932 59,870 63,206 66,231 
Table IV.4 (cont'd) 
                                                      
175 Ibid., Article 18. 
176 See, for example, Annex I "Services/Investm ent Non-Conforming Measures" of the DR-CAFTA. 
177 The contribution of the tourism sector to GDP and employment was estimated on the basis of data 
on the hotel, bar and restaurant sector.  On line information from the Central Bank of the Dominican Republic, 
"Economic statistics:  real sector" (viewed at:  h ttp://www.bancentral.gov.do/esta disticas.asp?a=Sector_Real) 
and "Economic statistics:  labour market" (viewed at:  http://www.bancentral.gov.do/estadisticas.asp?a= 
Mercado_de_Trabajo). 
178 On line information from the Central Bank of the Dominican Republic, "Economic statistics:  
external sector".  Viewed a t:  http://www.bancentral.gov.do/es tadisticas.asp?a=Sector_Externo. WT/TPR/S/207/Rev.1 Trade Policy Review 
Page 104 
 
 
 2001 2002 2003 2004 2005 2006 2007 
Occupancy rate (%) 66.3 62.8 72.7 74.2 73.9 73.0 72.2 
Foreign exchange generated (millions of  US$) 2,798 2,730 3, 128 3,152 3,518 3.792 3,972 
Contribution to GDPa (%) 6.7 6.6 7.5 7.6 7.6 7.2 6.9 
a Contribution of hotels, bars and restaurants. 
Source : On line information from the Central Bank of the Do minican Republic:  "Economic statistics" (viewed at:  
http://www.bancentral.gov.do), and info rmation provided by the authorities. 
153. Sector policy is formulated by the executive branch179 and implemented by the Ministry of 
Tourism.  Congress is considering replacing the Executive Committee for Tourist Area Infrastructure by the National Institute for Tourism Development and creating an Institute for Tourism Promotion 
and Image.  Part of the strategy for the sector consists in "moving away from the enclave tourism 
model … characterized by a relative inability to entrain the domestic economy and poor community 
integration, towards one that is competitive and sust ainable, with a view to making tourism the future 
engine of the Dominican economy, capable of boosti ng the entire capacity for integration of all the 
stakeholders in the global value chain".
180  There is also a national strategic plan for the development 
of ecotourism. 
154. The legislation does not impose limitations on fo reign investment in the tourism sector.  
Travel agencies and tour operators established abroad  must have a local agent to provide services in 
the Dominican Republic.181  Tourist guides that provide services in the Dominican Republic must hold 
a licence issued by the Ministry of Tourism.182  Licences may be issued to  foreign guides "only in 
exceptional cases", for example, if there are no Dominican guides who speak the language of a tour party.
183  Casino and bingo employees must be Dominican citizens.184  Drivers who transport tourists 
by road must be residents of the Dominican Republic.185 
155. Law No. 158-01 offers tax incentives to investors in tourism projects located in "low-growth 
areas" ( polos de escaso desarrollo ) and "new poles in high-potential provinces and localities".186  The 
Law provides for exemption from duties and other taxes resulting from the importation of products needed to launch a project and vari ous other national and municipal tax es, such as those relating to the 
constitution of company capital and capital increase s, the transfer of property rights, and 
construction.
187  It also establishes exemption from inco me tax and allows companies engaged in 
activities other than tourism to deduct their investme nt in a tourism project from their net taxable 
income.188 
                                                      
179 Law No. 84 amending Law No. 54 1 of 31 December 1969 on the organization of tourism in the 
Dominican Republic. 
180 National Competitiveness Council (undated). 
181 Law No. 541 on the organization of tourism, Article 18. 
182 Ibid., Article 22. 
183 Ibid., Article 23. 
184 Decree No. 6273 authorizing the establishment of casinos, bingo games and fruit machines, 
Article 2. 
185 Regulation No. 817-03 on tourist road  passenger transport, Article 11. 
186 Law No. 158-01 of 9 October 2001 establishing the Law on the promotion of tourism development 
for low-growth areas and new poles in high potential pr ovinces and localities and creating the Official Tourism 
Promotion Fund. 
187 Ibid., Article 4. 
188 Article 6, paragraph II. The Dominican Republic WT/TPR/S/207/Rev.1 
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156. Architectural plans and "preliminary engineering details" submitted in connection with an 
application to claim benefits under the Law must  have been drawn up by Dominican professionals.189  
Foreign professionals wishing to participate in th e development of tourism projects that receive 
benefits must do so through a firm established in the Dominican Republic.  
157. The Ministry of Finance estimates that the va lue of tax concessions granted to the tourism 
sector will amount to RD$1,066 milli on (about US$32.2 million) in 2008.190 
 
                                                      
189 Law No. 158-01, Article 14. 
190 Ministry of Finance (2007). The Dominican Republic WT/TPR/S/207/Rev.1 
 Page 107 
 
 
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