DOMINICAN REPUBLIC

In 1994, the U.S. trade deficit with the Dominican Republic was $294 million, or $28 million less than that in 1993. U.S. merchandise exports to the Dominican Republic were $2.8 billion, up $449 million or 19 percent from 1993. The Dominican Republic was the United States' thirtieth largest export market in 1994. U.S. imports from the Dominican Republic totaled $3.1 billion in 1994, or 15.8 percent greater than that in 1993.

The stock of U.S. foreign direct investment was $1 billion in 1993, 30.9 percent higher than that in 1992.

IMPORT POLICIES

Tariffs

Tariffs on most products fall within a 5 to 35 percent range. However, the Government of the Dominican Republic imposes a 5 to 80 percent selective consumption tax on "non-essential" imports such as home appliances, alcohol, perfumes, jewelry, automobiles and auto parts. In the case of automobiles, the tax is differentiated by engine size, which may have a restrictive effect on U.S. auto imports. On many products U.S. producers may face an additional "de facto" trade barrier in the form of a highly discretionary customs valuation system. In addition, import licenses are required for some agricultural items such as fruit juice.

Customs Documentation, Customs Procedures and Sanitary Measures

The Dominican Republic continues to require a consular invoice and "legalization" of documents with attendant fees, which must be performed by a Dominican consulate in the United States. Moreover, importers are required to obtain licenses from the Dominican Customs Service. Many business people complain that bringing goods through Dominican Customs is a slow and arduous process. Arbitrary customs clearance procedures sometimes cause firms to have their merchandise held up for as long as a year. U.S. poultry exports to the Dominican Republic are further restricted by an array of non–scientifically based sanitary measures.

LACK OF INTELLECTUAL PROPERTY PROTECTION

Copyrights

Although intellectual property laws of the Dominican Republic provide for copyright protection, enforcement of protection against the piracy of computer software, video and audio tapes and compact disc technologies is weak. In 1993, the U.S. Government accepted a petition by the Motion Picture Export Association of America (MPEAA) to have the Dominican Republic's trade preferences under the Generalized System of Preferences (GSP) reviewed due to widespread piracy of satellite signals by local cable television operators and lack of implementing regulations for the

domestic cable law. The review was terminated in 1994 due to efforts by the Dominican Government to address U.S. concerns.

Patents

Existing law is inadequate with respect to the term of protection and broad exclusions of subject matter from patentability. Moreover, the current patent law includes onerous local working requirements. Piracy is also widespread. In a local pharmaceutical market of approximately $110 million a year, Dominican manufacturers supply about 70 percent of the total. Of that, about 7 percent is believed to be pirated.

Trademarks

Protection for trademarks under existing law is inadequate, particularly in the area of well–known marks. Many apparel brands are counterfeited and sold in the local market.

INVESTMENT BARRIERS

Foreigners may invest only with the authorization of the Directorate of Foreign Investment. Foreign investment is prohibited or severely limited in public services, advertising, newspapers, magazines, publishing, forestry, farming, insurance and property development. All contracts with foreigners for the use of trademarks, or for the use of specialized technical knowledge, must be submitted for registration. The Directorate is free to declare any other area closed to foreign investment.

Registered capital may be remitted only upon the sale or liquidation of an investment. Capital gains equal only to 2 percent of the registered capital may be remitted in a year. Profits equal only to 25 percent of the registered capital may be remitted in a year. Intangible property may not be included in the capital base.

Dominican expropriation standards do not appear to be consistent with international law standards; several investors have outstanding disputes.