Page 1


Investment climate (1-5)

Situation and Perspective

Economic Aspects (6-10)


(11-14) •

2 0 1 1

Politic aspects

> Investment Climate  >Clima de Inversiones<

Legislative aspects (15-18)

1-DR improves trade with China

IN THIS ISSUE: DR improves trade with 1 China Seek increase in trade


DR looses competitive- 3 ness in tourism The assets of Popular 4 Bank grew 15% Falconbridge initiates its production


FMI urges Government 6 to revert reduction of fiscal pressure Fiscal pressure of 2010 7 decreased

The export trade of the Dominican Republic with People’s Republic of China (mainland China) is turning positive for our country. The last two years have been of surplus for the Dominican trade balance, although the consolidated trade balance for the past five years shows a high deficit. The statistics reflect that there is an important trade exchange among the Dominican Republic and People’s Republic of China, whose economy has just ascender to the second place worldwide, displacing Japan.

The importance of trade with mainland China is present in the Dominican Republic. In the last five years the trade exchange with mainland China provides a consolidated balance of US$1,471.47 Million, with a negative balance INVESTMENT for the country US$525.58 Million. CLIMATE OF THE COUNTRY IMPROVED 8.3 POINTS THIS YEAR WHEN Published by: El Caribe, March 14th, 2011. REACHING A SCORE OF 43.3

2- Seek increase in trade The Center of Export and Investment of the Dominican Republic (CEI-RD) and the Brazilian and the Brazilian Agency for the Promotion of Exports and Investments (Apex-Brazil) made on the past March 29th an encounter.

More than 50 Brazilian enterprises belonging to the machine, foods, automobiles, electronic home appliances, construction and medical products participated; while from the Dominican more than 210 companies from different areas, who listened to the offers, participated.

Free Zones generate 35 thousand jobs 2011


Inflation in February


In the activity titled “Commercial Mission of Brazil in the Dominican Republic” the proposals that were made was to increase the commercial relations between Brazil and DR.

Exchange rate


3- DR second country in Latin America that looses more competitiveness in tourism

Government in austerity Baja el IPC

11 12

Subsidio Mejía eléctrico Hipólito wins PRD convention Turismo sigue creciendo Exchange rate Fernandez leaves open the reelection chapter New Ambassador of the Recaudaciones de DGII

13 12

The Dominican Republic was the second country in Latin America that lost more competitiveness in the tourism sector in Latin America, according to the report Competitiveness Index (TTCI), followed by Brazil.

US in theholds DR aumentan PRSC troubled meeting Tasa de Cambio Measures against corrupLF submitsentre to Congress Entrevista LF y tion the National Develop5 newStrategy members for the ment Captura de Figueroa Accounts Chamber


14 12 13 13 15

16 14 15 17 15 18

The Nationalfor Magistrate Regulations the appliCandidaturas cation ofLaw Law presiden488-08 are Council ready Legislaciónobserves contra el ConPresident Mortgage draft bill would stitutional Tribunal Orclientelismo createLaw an inequality reganic Aprueban consejos PJ y gime

16 16 19

Ley de reestructuración mercantil


20 17 17

21 Pro Consumer Institute 18 Submitting to 18 already has contracts the contracts Leyes crean “incentivos” 22 Consumer of adhesionProtection

Published by: Hoy, March 29th, 2011.

While Brazil lost seven positions, as in the ranking of 2009 it was in 45th place out of 133 countries and passed to the 52nd position out of 139 countries in 2011, the Dominican Republic de3$175 five MMpositions, Availablewhen for Micro Enterprises scended going from 67th to 72nd place. Published by: Hoy,and March 9, 2011. The Bank Ademi Proparco, an affiliate of the French Devel3IIBI: plataforma para la competitividad-país opment Agency (AFD) signed an agreement by which the local financial entity of willPopular receivedBank a loan of 175 4The assets grew 15%Million pesos to fiLa competitividad de las empresas dominicanas, en el nance micro enterprises in the whole country. la apertura global, está garantizada en on el InstituThe Banco Popular Dominicano held itsmarco AnnualdeGeneral Ordinary Shareholders Meeting to de Innovación y Biotecnología e Industria (IIBI), March 19th. There the Banco Popular reported that it closed its corporate period for the yeara partir Manuelwith Arsenio Ureña, president of Bank specified: “WeMillion, biotecnológica deAdemi procesos de investigación y dein-calidad 2010 assets totaling an amount reaching RD$178,643 experimenting an will support an enormous number of micro businessmen of the inenrelation internacional reconocidos EstadostoUnidos y Europa. crease of RD$23,601 Million, equivalent to a growth of 15% the total of whole sector. Million But thisreached fund willatbe specially for the agrito preliminary figures. RD$155,042 thedestined closing of 2009, according Encountry, el IIBI funciona único laboratorio de República Domibusiness projects of micro farmers of the from theeldifnicana con la certificación de la norma de calidad 17025, ferent agricultural Published by: Hoy, zones”. March 9th, 2011. la Bank cual garantiza el acceso a mercado de los productos Ureña informed that loan portfolio of the Ademi reaches industrializados que asuman esa certificación para entrar the 7,100 Millioninitiates pesos; the of the same are credits that 5-Falconbridge its 97% production sin problemas a los países más exigentes del mundo, afirrange from 3,000 up to 300,000 pesos. mó la directora del organismo, Bernarda Castillo. Starting from the month of March the operations of Falcondo successfully initiated their production to Hoy 50%Newspaper, of their capacity, with estimated production an estimated Publicado por: Periódico Listínwith Diario Published by: December 15an 2010. production of 12,400 tons of nickel for the year 2011. Published by: Falconbridge Dominicana, S.A. March 17th, 2011.




> Economic Aspects:  6- FMI urges Government to revert reduction of fiscal pressure The International Monetary Fund Mission (IMF) that visited the country from 21st to 24th of March highlighted the need to revert the worrying reduction of the tax collection coefficient /GDP and to adopt a more flexible mechanism for setting prices of electricity rates, for the purposes of limiting the fiscal cost that the high prices of petroleum oil for the purposes of limiting the fiscal cost that represent the high prices of petroleum oil.

proposal from the authorities to introduce flexibility in some of the goals and the objectives of the program in reaction to the shocks in the prices of foods and fuels, and the need to strengthen the welfare expenditure, while also permitting a relaxed limitation the current deficit of the Dominican Corporation of State Electrical Enterprises. Published by: Hoy, March 28th 2011.

The mission reported that it analyzed the

7-The Fiscal pressure last year decreased to 12.9% The Minister of Finance disclosed a report in the month of March, that in 2010 the fiscal pressure of the country was of only 12.9%. “While it is true that an increase in the income was registered with respect to the previous year, it is also true that a slight absence with respect to the budget estimates of 2010, reaching the fiscal pressure to 12.9% the same level reached in 2004”, he pointed out in the Memoirs of the Ministry of Finance and its Dependencies of 2010. Published by: Listín Diario, March 14th, 2011.

8- Free Zones generate 35 thousand jobs this year The free zone enterprises of the country will generate this year up to 35 thousand direct and indirect jobs through an investment of RD$3,400 Million in the execution of several projects approved by the National Free Zones Council announced the sub director of the organism Mr. Benedicto Hernandez, who reported also that at the closing of 2010 in the free zone parks operated 558 enterprises, 25% of them of the textile and apparel, 19% in services, 10% in the manufacture of shoes and 5% in medical and pharmaceutical products. Published by: Hoy, March 2nd, 2011.

9- Central Bank reports inflation until February was of 2.46% The Central Bank reported that the inflation in February, measured with the new basket to calculate the Consumer Price Index (CPI) December 2010 was of 1.20 percent. The institution pointed out that the inflation for February places the accumulated inflation of the two first months of the year in 2.46% and places the annualized inflation February 2010 February - 2011 in 7.29 percent. Published by: Hoy, March 15th, 2011.

10– Exchange rate and fuel prices

During the course of the month of march, the Dollar of the United States has remained between RD$ 37.65 and RD$ 37.84, while the euro has remained between the RD$ 50.97 and RD$53.76. With respect to gasoline, the price of the gallon of Premium until April 5th was of RD$208.70 and the price of the gallon of regular was RD$197.10.

“Exchange rate and gasoline prices”





> Politic Aspects < 11-Government in austerity; establishes food plan and changes in transportation The Chief of State directed on the night of the 17th of March a speech of almost 40 minutes through a radio and television network in which the announced a package of measures for facing the impact in the increase of the international prices of fuels and foods that, also, include that by decree the units of interurban public transportation of persons and cargo and which will work every second day. He held that the savings measures will start from the Government’s side and that it was in that sense that he instructed the Ministry of Finance so that he reduces the public spending in a 12%, exempting from the

measure the ministries of education, health and that related to the welfare programs. The president Leonel Fernandez ordered to the Ministry of Finance that it broadens the use of natural gas and announced that it will put in sale a package of food products that will represent savings of almost one thousand pesos weekly and an agreement with transporters to freeze the price of public transportation in exchange to the facilities that the government will give the Government. Published by: El Caribe, March 18th 2011.

12-Hipólito Mejía wins PRD convention, internal crisis unleashes On the past 6th of March the XXIX Extraordinary Convention of the Dominican Revolutionary Party (PRD) took place. The candidates were Miguel Vargas Maldonado and Hipólito Mejia. It is proper to highlight that these signed on March 3rd a party members agreement in which they agreed to respect the results of the convention of such political organization. Finally, ON March 7th the Organizing Commission of the PRD party Convention proclaimed Hipólito Mejía as presidential candidate of the white party for the presidential elections of 2012, after the contender Miguel Vargas Maldonado objected the results and declared himself unilaterally as winner. The data offered in the bulletin number 4 by the president of the Commission, Emmanuel Esquea Guerrero, gave as a result that Hipólito Mejía obtained a 53.3% percent and Miguel Vargas Maldonado a 46.7% percent, while the missing 17.52% percent of the votes were pending to be computed.

Miguel Vargas after knowing of the results accused that there were irregularities in such convention and requested the president in functions of the Dominican Revolutionary Party, Andrés Bautista, and the general secretary, Orlando Jorge Mera, taking account in the Political Commission in what it understands were violations of the National Convention Organizing Commission. A political crisis unleashed in the Dominican Revolutionary Party (PRD) which worsened with the expulsion of doctor Emanuel Esquea Guerrero, under the accusations of "violating the by- laws, in subordinating in face of the decisions issued by the superior organs and misappropriate the powers corresponding to such organs. The doors to the house of the PRD until March 30th remained closed and only permitting the entry of personnel that the followers of Vargas Maldonado authorized. Published by: El Caribe, March 30th 2011.

13- Leonel Fernandez leaves open the reelection chapter On March 27th Leonel Fernandez presented himself before his followers to respond to the request that was made to him through the collection of more than 2 million signatures requesting that he accept his repeat run for the presidency. President Leonel Fernandez left in the hands of the Dominican Liberation Party (PLD) the decision of accepting or not his repeat run for the presidency, and of deciding what to do with the 2.2 Million signatures that the legislators of the government party collected so that he is, once again, their presidential candidate. “I allow myself to pick up this support that you offer to hand it over to the PLD, in a way that it is the party that decides what is the future that corresponds to in a way that it is the party who decides what is the future that corresponds to the Dominican Republic”, held the president of the PLD when directing himself to its sympathizers in the Palacio de los Deportes Virgilio Travieso Soto. Fernandez declared that with the signatures gathered by the movement “Sí (Yes) Leonel”, directed by Felix Bautista and Freddy Perez, the PLD assures another electoral victory in the presidential election of March 2012. He defined as a plebiscite democracy the massive request for his repeat run for the presidency and highlighted that that initiative and highlighted that such initiative of the population does not have precedents in Dominican Republic. Published by: El Caribe, March 28th 2011.





14- The PRSC holds troubled meeting The Executive Commission of the Reformist Social Christian Party (PRSC) did not achieve on the past 24th of March an agreement with respect to the date in which their primaries will take place to select the presidential candidate of the organization for the 2012. Gathered in a hotel in the Dominican capital, the reformists decided to discuss the topic once again the next 3rd of April. The encounter ended with an enormous quarrel and aversion among the delegates and the leadership of the PRSC, in which they even grabbed chairs and other utensils to throw them to their compatriots. On the other hand, the Reformist party deputy, Víctor -Ito- Bisonó, presented on the past 27th of March his contending presidential candidature for the political organization with the exhortation to his colleagues to leave aside the feuds and the egoism. Published by: El Caribe, March 25th 2011; Diario Libre March 27th 2011.

>Legislative Aspects<

15–LF submits to Congress the National Development Strategy both in the placement of advertising, as in the conductThe Executive Branch presented on Monday March 7th to the ing of political mobilizations. Also the former adminisNational Congress, via the Senate of the Republic, the draft bill of the Dominican Strategy Corporation of State for thetrator National Development 2030, with aElectrical new model Enterprisesthat (CDEEE) Radamés of development proposes, on one Segura side, tohas facerecently the main been reactivated the race, the listinofthe problems and delays thatin exhibit the broadening Dominican society leaderssocial, in campaign, of which since some time isand, also on institutional, economic, environmental arenas, composed by the Danilo Medina,that Franklin Almeyda, the other side, face challenges the future has inJosé store, Tomas Brito and Franassociated to aPerez, world Francisco in constantDominguez change in technology, climate cisco Javier Garcia. and relationships among nations and populations on a global level. Published by: El Caribe Newspaper, February 7 2011 Published by: El Caribe, March 8th 2011.

16-President LF returns National Magistrate Council Law to Chamber of Deputies In the month of February the draft bill establishing the National Magistrates Council was approved by the two legislative chambers. Once it reached the Executive Branch, President Fernandez, made observations to the same, sending it once again to both legislative chambers for approval of the changes. The Chamber of Deputies approved on Tuesday 15th of March, in a single review reading, by simple majority, the observations that the Executive Branch made to the National Magistrate Council Organic draft bill (CNM). The initiative was approved with the favorable vote of 92 deputies, while 71deputies voted rejecting the observation made by the Executive Branch to the referred draft bill. The Dominican Constitution establishes under its article 112 that for the approval or modification of every organic law will require the favorable vote of the two thirds of those present in both chambers, but not of a simple majority as was done in this case.

Diverse postures were created as a result of the matter; the civil society became alarmed in face of such action and immediately proclaimed the unconstitutionality of the same. The Dominican Revolutionary Party (PRD) was the first party in filing an unconstitutionality recourse before the Supreme Court of Justice, the Revolutionary Social Democratic Party (PRSD) became the second political organization in submitting an unconstitutionality recourse against the National Magistrates Council Organic Law. Finally, after the controversy that was unleashed in the public opinion, President Leonel Fernandez returned the draft bill of the National Magistrates Council, for the new test, making reference to the fact that the Chamber of Deputies acted correctly in the sanctioning of the observations that it made to the initiative. Published by: Diario Libre 28 de March 2011.

17-President observes Constitutional Tribunal Organic Law The president Leonel Fernandez observed on the past Monday 21st of March the draft bill for the Constitutional Tribunal Organic Law due to a disagreement with the age of 75 years as limit to be able to belong to that organ. The draft bill was returned to the senate, the last legislative chamber who took account and approved with the amendment required by the legislators of the Dominican Revolutionary Party, who required that the age of retirement was of 75 years. Published by: 7 Dias, March 21st 2011.




18- Pro Consumer Institute already has the contracts of adhesion The contracts of adhesion that the commercial banks that operate in the Dominican Republic utilize since 2006 until today are already registered in the Institute for the Protection of the Rights of the Consumer (ProConsumidor). Just when the road was becoming long, the financial entities reached an agreement so that the Banks Superintendence (SB) submits to the consumer protection institution the legal documents. Published by: ListĂ­n Diario, March 14th 2011.



Russin, Vecchi & Heredia Bonetti

We are a law firm pioneer in the Dominican Republic in offering specialized services to a business community interested in the global economy, with the highest international standards of services, probity and professional excellence.

Calle El Recodo #2, Edificio Monte Mirador Third Floor Phone: 809-535-9511 Fax: 555-565-6649 E-mail: Web:

We are also one of the most recognized and experienced law offices, dedicated to facilitate the establishment of foreign investments with a well earned reputation as a good corporate citizen for our contribution to the improvement of the business climate and our support to the continuing education of professionals of the Law.

Revista Marzo 2011  

Ver Ingles