WORLD TRADE
ORGANIZATIONG/SCM/N/74/DOM
8 January 2002
(02-0057)
Committee on Subsidies and
Countervailing MeasuresOriginal:  English/
Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement on Subsidies and
Countervailing Measures
Requests Pursuant to the Procedure in Document G/SCM/39
DOMINICAN REPUBLIC
The following communication, dated 3 December 2001, has been received from the
Permanent Mission of the Dominican Republic.
_______________
Pursuant to the Decision on Implementation-Rela ted Issues and Concerns and with reference
to document G/SCM/39, adopted by the Fourth WTO Ministerial Conference held from
9 to 14 November 2001 in Doha (Qatar), the Go vernment of the Dominican Republic wishes to
request an extension under Article 27.4 of the WTO Agreement on Subsidies and Countervailing
Measures.  This request is in response to the economic, financial and development needs of the
Dominican Republic.
In accordance with the provisions of paragraph 1(a) of document G/SCM/39, this request is
accompanied by a brief identification of the programmes that would be covered by the extension (see
Annex hereto) so that it may be given favourable  consideration by the Committee on Subsidies and
Countervailing Measures and approved in conform ity with paragraph 1(e) of document G/SCM/39.
This request is made without prejudice to the rights and obligations of the Dominican
Republic under the Agreement on Subsidies and Countervailing Measures and other WTO
Agreements.G/SCM/N/74/DOM
Page 2
GENERAL DESCRIPTION OF THE PROGRAMMES
Annexed hereto is Law 8-90 on Free-Trade Zones of 10 January 1990.  We would like to call
your attention to Chapter 7 of that Law, which describes the incentives and exemptions for free zones
that are eligible to be covered by the extension of the period established in Article 27.4, in accordancewith paragraph 2 of document G/SCM/39.
Specifically, Chapter 7 of the Law stipulates that all companies established in free zones,
regardless of their location, shall be exempt from the charges and taxes thereinafter for a renewable
period of 15 years (20 years if they are located in the Haiti border area) from the first day of
production.  The main elements of these programmes are as follows:
- Exemption from the payment of construction taxes, taxes on loan agreements, and on
the recording and transfer of real property from the date of formation of the free-zone
operator;
- exemption from the payment of tax on the formation of corporations and on the
increase in their capital;
- exemption from the payment of municipal taxes which may affect their activities;- exemption from the payment of any import taxes, tariffs or customs duties and related
levies on raw materials, equipment, construction materials, parts for buildings, office
equipment, etc., destined for construction, preparation or operation within the free
zones;
- exemption from the business tax ("patente") on inventory or assets and of the Tax on
the Transfer of Industrialized Goods ("ITBIS");
- exemption from consular charges on importations consigned to free-zone operators or
enterprises;
- exemption from import duties on equipment and utensils for the installation and
operation of cafeterias, health services, medical assistance, child care centres,entertainment or amenities or other equipment for the well-being of the working
class;
- exemption from the payment of duties on the importation of transportation
equipment, such as trucks, garbage trucks, microbuses, minibuses for thetransportation of employees to and from work;
- exemption from duties on materials used to construct housing for employees in the
free zones;
- exemption from duties on materials and equipment used in the establishment and
operation of the above-mentioned companies;
- exemption from the payment of corporate income taxes, as set forth in Law No. 5911
of 22 May 1962, as amended.
While this list in not exhaustive, the annexed legislation contains a more complete description
of the programmes.  The activities of the companies established in the free zones cover the production
of all goods and services.G/SCM/N/74/DOM
Page 3
LAW 8-90
Free-Trade Zones
THE NATIONAL CONGRESS IN THE NAME OF THE REPUBLIC
Whereas:  The free-trade zones have become a permanent source of employment and income
for the Dominican people, due to the fact that they can be established in any part of the country,including places where jobs cannot otherwise be created in a speedy and effective manner;
Whereas:  It is in the national interest to promote a policy of increasing employment by
stimulating the creation of new enterprises, whose production is aimed primarily toward the export
market;
Whereas:  A rapid and harmonious development of the free-trade zones of the country
requires a consolidation of the various rules of law scattered throughout the existing legislation;
Has Passed the Following Law:
Chapter One
Purposes, concepts, and general definitions
Article 1- The purpose of the present law is to stimulate the establishment of new free zones
and the growth of the existing ones by regulating their operation in such a way as to achieve goals
consistent with national interest, through the concerted action of the public and private sectors.
Article 2- A free zone is defined as a geographic area of the country under special customs
and tax controls, as set forth in this law, in which enterprises will be licensed to devote theirproduction of goods or services to foreign markets through the granting of incentives to stimulate their
development.
Paragraph - A sale of goods from a free zone to the Dominican territory shall be considered
an export from the free zone and an import into th e Dominican territory.  Conversely, a sale of goods
from the Dominican territory into a free zone shall be considered an export from the Dominican
territory and an import into the free zone.
Article 3- The free zones shall be clearly stak ed-out areas surrounded by impassable fences or
walls, so that the movement of persons, vehicles, and cargo is done exclusively through gates whichare supervised and controlled by personnel of the Customs Department.
Article 4- The benefits of this law are available to any physical or legal person who
contributes to the development of the country by increasing production, generating employment, and
increasing the supply of foreign currency.
Chapter Two
The beneficiaries
Article 5- The following natural or legal persons shall be eligible to receive benefits under
this law:G/SCM/N/74/DOM
Page 4
(a) Free-zone operators are physical or legal persons in whose favour decrees have been
issued by the Chief Executive upon the recommendation of the National Free Zones
Council authorizing them to operate free-zones.  Their purposes are to purchase or
lease real estate, to create infrastructure, to sell or lease buildings and other facilities
to enterprises presently established or to be established in the future, and to undertakepromotional activities to attract other enterprises, whether national or foreign.
(b) Free-zone enterprises are physical or legal persons in favour of whom licences have
been issued hereunder and who are engaged in the production of goods and services
for export.
(c) Free-zone investors are physical or legal persons who invest capital in, provide
financing for, or purchase securities issued by, free-zone operators and/or free zone
enterprises.
Chapter Three
Types and locations of free zones
Article 6 - There shall be the following types of free zones and restrictions on their location:(a) Industrial or Services Free Zones may be established in any part of the national
territory to engage in the manufacture of goods or the performance of services.
Paragraph - For the National District, the Chief Executive is empowered by
regulations to limit the installation of free zones to such as will have plants using
advanced, technological processes, whether industrial or service-oriented, whichrequire highly qualified personnel.
(b) Border free zones, which qualify for special incentives, such as those set forth in
Article 29 or those, which the Chief Executive may grant within the scope of his
constitutional powers.  Such free zones shall be located in a band of not less than
three (3) nor more than twenty-five (25) kilometres from the border separating the
Dominican Republic from the Republic of Haiti.
(c) Special free zones, which, because of the nature of their productive processes, utilize
resources whose transformation would be difficult if such enterprises were not
established in the proximity of their natural resources, or which, because of the nature
of their processes or geographical or economic considerations or the infrastructure ofthe country, require a special location.  Existing enterprises which utilize temporarily
imported raw materials in their productive processes may also be classified in this
category.  They may operate temporarily or permanently.
Paragraph - Enterprises presently operating under temporary import licences must
export at least 80 per cent of their production and have at least 200 employees in a
single location or plant in order to qualify under this law. Such industries shall have aperiod of only one year from the promulgation of this law to be licensed hereunder.
Chapter Four
Free-zone operators
Article 7- Promoters, organizers or founders of  projects for the establishment or development
and administration of free zones must obtain a licence issued by the National Free Zones Council andG/SCM/N/74/DOM
Page 5
ratified by means of a decree issued by the President of the Republic before initiating their operations
and activities hereunder.
Paragraph I- Licences to operate free zones may be issued to entities which are either public
or mixed, national or foreign.
Paragraph II- Free-zone operators shall be represented by investor or boards of directors, as
the case may be or natural or legal persons. They may issue bonds or debentures to finance the
construction of buildings and/or the purchase and development of land, with the approval of the
Superintendent of Banks in cases where such approval is required under existing laws.
Article 8- Free-zone operators may construct of fice buildings, warehouses or industrial or
service buildings, which may be used individually or collectively, through sale or lease to free-zone
enterprises.
Article 9- Free-zone operators are required to satisfy the following basic requirements before
initiating operations:
(a) The existence of adequate working areas for industrial labour, with indispensable
basic services, in structures which conform to modern practices and generallyaccepted architectural standards.
(b) Lawns and other open areas, which assure pleasant surroundings, well ventilated
spaces and adequate general working conditions.
(c) Installation of drainage and sewer systems as well as supply of drinking water and
water for industrial use, in accordance with generally accepted practices.
(d) Facilities for incineration or disposal of refuse, which assure proper hygiene and an
adequate physical appearance for the buildings and common areas.
(e) Adequate physical facilities and equipment for food preparation, emergency medical
services, etc., for workers as well as office personnel.
(f) Spaces for customs and administrative offices, etc.
Article 10- Free-zone operators may freely stipulate the prices for leasing or selling space to
be occupied by the enterprises established therein.  They may also set the prices for services offered
by them such as garbage removal, customs processing, security, medical assistance, and others.  Lease
agreements and service contracts must be registered with the Secretary of the National Free ZonesCouncil.
Article 11- Each free-zone operator shall be required to pay an annual fee set by the National
Free Zones Council to cover its budget.
Article 12- Each-free zone operator must file a monthly report with the Central Bank of the
Dominican Republic covering its income and expenses to facilitate foreign exchange controls.
Chapter Five
Free-zone enterprises
Article 13- Free-zone enterprises are physical or legal persons whom the National Free Zones
Council has licensed to operate under this law and which devote their production of goods or servicesto export.G/SCM/N/74/DOM
Page 6
Paragraph - The sale or transfer of goods, equipment or services from one free zone to another
or among enterprises located in a same free zone or between a free-zone enterprise and one which
operates under Law No. 69 of 16 November 1979, shall be permitted, subject to the approval of the
National Free Zones Council and upon compliance with the legal requirements applicable in such
cases.
Article 14- An enterprise interested in establishing itself in a free zone shall submit an
application form to the National Free Zones Council, containing the following information:
(a) Name, address, and nationality of the person, enterprise and/or its shareholders;(b) authorized capital and paid-in capital;(c) composition and origin of the capital;(d) type of goods to be made or service to be performed;
(e) numbers and types of jobs to be created for nationals and foreigners;
(f) local value-added to be produced;(g) description of raw materials, semi-finished products, packaging materials, machinery,
labels, and equipment to be imported, as well as the estimated value thereof;
(h) any other information which the National Free Zones Council may request for its
evaluation, in view of the type of project involved.
Paragraph - A summary of the application shall be published in the local press for two (2)
consecutive days, so as to give an opportunity to oppose the granting of the application.
Article 15- At the time of filing the application, the applicant shall pay a fee to the National
Free Zones Council to cover the cost of processing the application.
Article 16- Any physical or legal person wishing to go into business in a free zone must
obtain a licence issued by the National Free Zones Council.
Article 17- Enterprises licensed to operate in the free zones may:
(a) Introduce, store, unpack and re-pack, recy cle, exhibit, manufacture, mount, assemble,
refine, process and deal in any type of product, good or equipment.
(b) Provide services, such as design layout, marketing, telecommunications, printing,
data processing, translation, software development, and any other similar or relatedservice.
(c) Introduce into the free zone any and all machinery, equipment parts, and tools which
may be needed in their operations.
(d) Transfer materials, equipment, machinery, etc., as well as labour and services from
one free zone enterprise to another or between enterprises of different free zones,provided the transit regulations from one free zone to another are complied with, asset forth in Chapter 8 on Customs procedures.G/SCM/N/74/DOM
Page 7
(e) Export up to 20 per cent of their production into the local market, provided the
products are manufactured in the country and their importation is permitted by law,
under the control and supervision of the Customs Department and subject to thepayment of 100 per cent of the import duties.
(f) Export into the local market goods and/or services produced by them, subject to the
payment of 100 per cent of the import duties applicable thereto, provided the
following conditions are met:
(1st) That the product to be exported is not manufactured in the Dominican
Republic except in a free zone or
(2nd) That the product to be exported contains local components or local raw
materials to be extent of at least 25 per cent of its total value.
Paragraph - The Directorate of Industrial Development, upon the recommendation of
the National Free Zones Council, shall issue a certificate specifying the percentage of
import duties to be paid under this Article.
(g) Purchase in the local market, free from export duties, for their industrial or service
needs, raw materials, packaging materials, labels, services, etc., with the exception of
sugar, coffee, cocoa, gold, and other products subject to export duties in excess of
20 per cent of net value, or those whose importation is subsidized for popularconsumption.
Paragraph I- The free-zone processing of sugar, coffee, cocoa, gold and other products subject
to export duties in excess of 20 per cent of net value may be authorized by the National Free Zones
Council, provided it can be demonstrated that the value added will be equal to or higher than 50 percent of the value of the raw material.
Paragraph II- Enterprises established in the Dominican territory shall be fully exempt from
the payment of import duties and related taxes on the importation of raw materials destined for
transformation into finished or semi-finished products which are exported into the free zones, subjectto the prior approval of the National Free Zones Council and of the Directorate of IndustrialDevelopment.
(h) Change production lines and production processes as often as necessary, subject only
to prior notification to the National Free Zones Council.
Article 18- All free-zone enterprises shall render a monthly report to the Central Bank of the
Dominican Republic, with a copy to the operator of their zone and to the National Free Zones
Council, covering their operations hereunder.  Said report must be handed in before the 15
th day of
each month and must specify the expenses incurred in the country, so as to facilitate foreign exchangecontrols.
Chapter Six
The National Free Zones Council
Article 19- The application of this law shall be undertaken by the National Free Zones
Council, which will have the following functions:
(a) To review and formulate recommendations to the Chief Executive with respect to
applications of free zones, as set forth in Chapter 3 hereof.G/SCM/N/74/DOM
Page 8
(b) To review and approve or reject applications for licences to establish free-zone
enterprises and the renewal of such licences upon their expiration.
Paragraph - Applications for licences to establish free-zone enterprises shall be filed
with the Executive Director of the National Free Zones Council or his deputy and
shall be reviewed in a period not exceeding thirty (30) Working days from the date of
filling.
(c) To formulate comprehensive policies for the promotion and expansion of the free
zone sector.
(d) To participate in the negotiation of local and international agreements and treaties
relative to the operations and activities of the free zones; and to generate the statistics,
procedures, and controls necessary to carry out signed agreements and treaties.
(e) To regulate and define the relations between the operators and the free-zone
enterprises, as well as those between the latter and the National Free Zones Counciland any other entity whose activities are closely related to the operation of the freezones.
(f) To enforce the present law and related legal provisions and institute the necessary
measures in cases of violation.
Article 20- The National Free Zones Council is composed of representatives of the public and
private sectors. Its members are:
(a) The Secretary of Industry and Commerce, who will preside;(b) The Secretary of Finance;
(c) The General Director of the Industrial Development Corporation ("CFI");(d) The Executive Director of the Dominican Export Promotion Centre ("CEDOPEX");
(e) The Chairman of the Foreign Investment Promotion Council;
(f) The Executive Director of the National Free Zones Council, who shall act as its
Secretary, and have a voice, but no vote;
(g) Two representatives of the free-zone operators, freely elected by all operators of the
country with the exception of CFI.  The designation of each member shall be for aperiod of two years and shall be rotated.
(h) Two representatives from the associations of free-zone enterprises, freely elected
among them for two years and subject to rotation;
(i) The Governor of the Central Bank of the Dominican Republic;
(j) A member of the Dominican Exporters' Association ("ADOEXPO") selected by said
Association;
(k) Persons invited for special occasions to participate with voice but without vote:
• The Secretary of Labour;
• The General Director of Customs;G/SCM/N/74/DOM
Page 9
• The General Director of the Income Tax Department;
• The General Director of the Dominican Institute of Social Security;
• The Executive Director of the National Institute of Technical and
Professional Training ("INFOTEP").
Article 21- The National Free Zones Council shall meet regularly as needed.  However,
regular sessions shall take place at least every thirty (30) days.  The Council shall be able to pass
resolutions when one half plus one of its members are present, and final decisions shall be taken bythe favourable vote of one half plus one of those in attendance.  In case of a tie, the decision of theChairman of the Council shall be controlling.
Article 22- The National Free Zones Council shall have an Executive Director appointed by
the Chief Executive from a list of three candidates submitted by the National Free Zones Council.
Article 23- The ex officio members of the Council may be represented at meetings by
subordinates of their respective agencies appointed for each session. In case of absence of theChairman of the Council or his delegate, meetings shall be presided by the member with the most
seniority.  The members elected by the operators and by the associations of free-zone enterprises may
be represented by proxies appointed before the National Free Zones Council.
Chapter Seven
Incentives and exemptions for free zones
Article 24- Free-zone operators and enterprises established therein shall be protected by the
tax and customs regime set forth in Article 2 above, and consequently shall be entitled to 100 per cent
exemptions from:
(a) The payment of corporate income taxes, as set forth in law No. 5911 of 22 May 1962,
as amended;
(b) The payment of construction taxes, taxes on loan agreements, and on the recording
and transfer of real property from the date of formation of the free-zone operator;
(c) The payment of the tax on the formation of corporations and on the increase in their
capital;
(d) The payment of any municipal taxes which may affect their activities;(e) The payment of import duties and related taxes on raw materials, equipment,
construction materials, parts for buildings, office equipment, etc., destined for
construction, preparation or operation within the free zones;
(f) All taxes on exports or re-exports, except such as are set forth in sections (f) and (g)
of Article 17 hereof;
(g) The business tax ("patente") on inventory or assets and of the Tax on the Transfer of
Industrialized Goods ("ITBIS");
(h) Consular charges on importations consigned to free-zone operators or enterprises;G/SCM/N/74/DOM
Page 10
(i) Import duties on equipment and utensils for the installation and operation of
cafeterias; health services, medical assistance, child care centres, entertainment or
amenities or other equipment for the well-being of the working class;
The payment of duties on the importation of transportation equipment, such as trucks, garbage
trucks, microbuses, minibuses for the transportation of employees to and from work, subject to the
prior approval, in each case, of the National Free Zones Council.  Such vehicles shall be non-transferrable for a period of a period of at least five (5) years.
Article 25- Free-zone operators and enterprises wishing to construct housing for employees in
the Border Area and/or any other province mentioned herein which, in the opinion of the National
Zones Council, deserves preferential treatment, shall enjoy a 100 per cent duty exemption on the
importation of construction materials and of the equipment necessary for the construction of such
housing.
Article 26- Profits invested or reinvested in th e establishment or growth of free zones shall be
exempt from income taxes under law No. 5911of 22 May 1962, as amended, by physical or legalpersons in the following percentages:
Paragraph - The annual deduction shall in no case exceed 50 per cent of the annual taxable
income, as provided in Law No. 71-86-30 of 22 December 1986, published in Official Gazette
No. 9701.
(a) One hundred per cent (100%), i.e. the full amount of the taxable income, in the case
of free-zone operators established in the Border Area pursuant to section (c) ofArticle 6;
(b) Eighty per cent (80%) of the taxable income for the National District and a radius of
50 kilometres therefrom;
(c) Ninety per cent (90%) of the taxable income for operators located in geographical
areas other than those described in sections (a) and (b) above.
Article 27- Investments in shares, bonds or debe ntures must remain in place during a period
of at least three (3) years, and amount of the in vestment for which an exemption was obtained may
not be refunded to the investors directly or indirectly during this period.  Such investments shall be
concentrated in: construction of buildings, land purchase and development, purchase of constructionequipment and materials and/or working capital.
Paragraph - The National Free Zones Council shall require an annual investment report
audited by a firm of Certified Public Accountants, showing the amount of the exempt investments and
the use made of such funds.  In case of a violation of this provision, the National Free Zones Councilshall so inform the Income Tax Department, whic h shall be empowered to cancel the exemptions
granted under the preceding article.
Article 28- Free-zone operators and enterprises shall enjoy the exemptions established herein
from their first complete year of operations for the following periods:
(a) Free zones located in the Border Area, for twenty (20) years;
(b) free zones located in the rest of the country, fifteen (15) years.
Paragraph - The National Free Zones Council may extend the duration of licences if it
considers it appropriate within the spirit of this law.G/SCM/N/74/DOM
Page 11
Article 29- In order to facilitate the establishment of free zones in the Border Area, consisting
of the provinces of: Monte Cristi, Dajabon, Elias Piñas, Independencia, Pedernales, Bahoruco, and
Santiago Rodriguez, the following special benefits are conferred:
(a) The Industrial Development Corporation ("CFI") as a State institution charged with
the promotion and development of industrial parks, may lease space to enterprisesestablished there at subsidized rents.
(b) The National Free Zones Council may assign preferential export quotas, in cases
where the country is subject to such a system.
(c) The National Free Zones Council may grant the status of Special Free Zone to
enterprises wishing to establish themselves  in that area, even when they do not
comply with the requirements of section (c) of Article 6.
(d) Free-zone operators and enterprises established in the Border Area are eligible for
preferential interest rates on loans granted by the Central Bank with FIDE funds for
the Border Area.
(e) In addition to the above- mentioned incentives, the National Free Zones Council may
propose to the Chief Executive other incentives for the Border Area.
Chapter Eight
Customs procedures
Article 30- Free-zone enterprises, as herein defined, may introduce into or withdraw from
their installations such equipment, furnishings, raw materials and any type of good appropriate to the
industrial activity in which they are engaged, subject to customs regulations and exemptions as herein
provided.
Article 31- The customs department shall establish an office in each free zone in charge of
enforcing the controls necessary to ensure that shipments are verified at the times of entry and
departure.
Paragraph – Free-zone operators must provide all the necessary facilities to carry out the
purposes of this Article, as instructed by the National Free Zones Council.
Article 32- In view of the specialized nature of customs work in the free zones and of the
large volume of goods entering and leaving the same, a subdivision is hereby created within thecustoms department devoted exclusively to servicing the free zones existing or to be established in the
country.  This subdivision will be under the control of the General Director of Customs.
Paragraph - A Special Corps of Customs Inspectors is hereby created to serve the free zones,
whose personnel and work locations shall be rotated.  This personnel shall be employed by theSubdivision mentioned in this Article 32.
Article 33- The following articles may not be imported into the free zones:
(a) Firearms, gunpowder, ammunitions and war material in general.  Authorized weapons
which may be carried for the security of the operators and enterprises shall be exempt
from the payment of taxes but shall comply with the procedures for importation and
use prescribed by the Armed Forces and the Secretariat of Interior and Police.
Military equipment which may be manufactured in the free zones is excepted from
this provision.G/SCM/N/74/DOM
Page 12
(b) Counterfeit money, in paper or coin, of any country, as well as the prints, facsimiles,
negatives or boards for the manufacture or impression thereof.
(a) Waste which may contaminate or put in danger the physical integrity of the
Dominican territory or the health of its inhabitants.
(b) Food, drink, snacks or other types of food to be consumed by persons working in the
free zone.
Article 34- All imports destined to the free zones shall be sealed upon arrival in the country,
and shall be shipped from the ports or airports to their destinations under the supervision and
responsibility of the Special Corps of Customs Inspectors, which shall deliver such goods to the
customs office of the respective zone which, upon receipt thereof, shall be responsible to verify andcheck the declarations and contents of the shipments being imported.
Paragraph - Any discrepancies which may be detected by the Inspectors between the shipping
documents and the contents of the importations shall be reported to the General Director of Customs
and to the National Free Zones Council, but shall not prevent the utilization of the goods by theconsignee, unless the articles are expressly prohibited.  The Customs Department may later take
whatever action is appropriate within the period prescribed by the Regulations established hereunder.
Article 35- Exports from the free zones shall be inspected by the customs inspector of the
respective office and, being sealed, shall be shipped under the supervision of the Special Corps ofCustoms Inspectors to the port of embarkation, where they shall be placed under the control of the
customs officer in charge of said port, who shall ensure that they are loaded on board the ship or
aircraft which will carry them to their destination.
Article 36- The transit requirements described in the paragraph of Article 13 shall be
complied with when goods or equipment are exchanged from one free zone to another or with an
enterprise operating under Law No. 69 of November 16, 1979.
Chapter Nine
Exchange of Currency
Article 37- Free-zone enterprises shall be subject to the special provisions of this law with
respect to the export of goods and services of the imports of materials, equipment, machinery, tools,
etc., in connection with the exchange of foreign currency with the Central Bank of the Dominican
Republic.
Article 38- Free-zone enterprises must exchange with the Central Bank of the Dominican
Republic, at the average rate for the day quoted by the said Bank, the amount of foreign currency
necessary to cover their local costs and services in general, such as:
(a) Installation costs;
(b) salaries and wages;
(c) raw materials, packaging materials, labels and intermediate products acquired in
Dominican territory;
(d) insurance in general;
(e) income tax with holdings on salaries of all employees, whether national or foreign,
who work in the business, and on dividends paid to shareholders;G/SCM/N/74/DOM
Page 13
(f) local transportation and communications;
(g) rent or purchase of land or buildings;(h) any other local cost or expense.
Paragraph - Transactions or operations carried out pursuant to the paragraph or Article 13
shall not be subject to the exchange of currency with the Central Bank, except for the local expenses
mentioned above.
Article 39- Goods exported from the free zones into the Dominican territory under special
Customs regulations shall be considered imports and shall be subject to the provisions of Law No. 251
of 11 March 1964, as amended, on International Transfer of Funds.
Article 40- free-zone operators and enterprises may obtain loans or guarantees in local or
foreign currency, granted by private, public, national, international or mixed financial institutions, in
accordance with regulations issued by the Monetary Board. They may also receive from national,
international, private or governmental financial institutions, out of their own funds or out of a nationalbudget, sums arising from loans to the Dominican Government or its institutions, granted by
international organizations or foreign governments or guaranteed by the Dominican Government, in
the form of loans or guarantees at short, medium or long term, subject to the provisions set forth in the
respective agreements.
Chapter Ten
Labour procedures
Article 41- Free-zone operators and enterprises must comply with all laws and regulations
governing labour matters.  They must also comply with the Social Security Act, the law governing the
Workers' Bank, Law No. 116 which creates the National Institute of Technical and Professional
Training (INFOTEP), the international treaties sign ed and ratified by the Dominican Government and
the public health laws relative to industrial facilities.
Article 42- The special minimum wage for the training period of apprentices prescribed by
the Labour Code shall be applicable to the free zones as Follows:
(a) For free zones in general, three (3) months;(b) for free zones located in the Border Area, six (6) months.
Article 43- If a worker is dismissed after completing his apprenticeship and is later rehired by
the same enterprise, he cannot again be treated like an apprentice.  If he has undertaken a part of his
apprenticeship, he may be treated as an apprentice only for the balance of his period of
apprenticeship.
Article 44- free-zone operators and enterprises which decide to terminate their operations in
the country must notify the National Free Zones Council three (3) months in advance, and the latter
shall transmit such notice to the Central Bank of the Dominican Republic, the Secretariats of Finance,
Industry and Commerce, and Labour, the Dominican In stitute of Social Security, the Worker's Bank,
the Department of Customs a nd the Income Tax Department.
Paragraph - Enterprises which do not comply whit the above requirement shall not be
permitted to withdraw their assets.  If within six (6) months after concluding operations, an enterprise
has without justification failed to removed its equi pment, the same shall be sold at public auction toG/SCM/N/74/DOM
Page 14
cover the debts of the enterprise, if any, and the balance shall be transferred to the state.  These
proceedings shall be conducted by the Customs Department which shall request the interested party to
remove its assets and warn such party that, if it fails to comply, its assets will be sold at public
auction.
Article 45- Free-zone enterprises which violate the provisions of this law and its regulations
are subject to cancellation by the National Free Zone Council of their licences to operate in the freezone and/or to export therefrom.
Article 46- Free-zone operators which violate the provisions of this law and its regulations
may be refused by the National Free Zones council permission for the installation of new enterprises
in their zones or for the renewal of licences by their existing enterprises and may be subject to repealof the decrees under which they operate.
Article 47- Free-zone enterprises which violate the present law and its regulations through the
illegal introduction of merchandise or other goods be subject to the payment of a fine of twice the
amount of the unpaid duties and confiscation of the goods involved.  Persons sentenced asaccomplices of the commission of such violations shall be jointly and severally liable for the payment
of the fine herein established.
Article 48- Article 45 and 46 may also be applied when operators or enterprises prevent the
competent authorities from inspecting their faciliti es or their records evidencing their exempted
equipment, machinery and materials or the payments made and services obtained in the country.
Chapter Eleven
General provisions
Article 49- All physical or legal persons operating a free zone at the time of promulgation
hereof under any law, decree of the Executive or contract with the Dominican Government, shall be
subject to the present law without prejudice to their existing rights.
Article 50- All enterprises classified in Category "A" under Law No. 299 on Industrial
Incentive and Protection of 23 April 1968, as amended, and established in the free zones prior to thepromulgation of this law, shall be subject to the provisions thereof without prejudice to their existing
rights.
Article 51- The Chief Executive shall issue the regulations considered necessary for the
proper application of this law, taking into account the recommendations of the National Free ZonesCouncil. Such regulations shall be concluded within ninety (90) days from the promulgation of this
law. Nevertheless, failure to issue regulations shall not preclude the application of this Law.
Article 52- The present law repeals and replaces Law. No. 4315 of 22 October 1955, which
creates the institution of the free zones, except insofar as it relates to the duty-free areas at harboursand airports;  Law No. 299 of 13 April 1968, in relation to the "A" Classification; Decree No. 895 of
19 March 1983, which creates the National Free Zones Council; Decree No. 310-88 of 30 June 1988,
which amends Article 1 of Decree No. 865; as well as any other law or regulation contrary hereto
except such as apply to the duty-free areas at harbours and airports, which are not governed by this
legislation.
PASSED in the Hall of Sessions of the chamber of Deputies in the Palace of the National
Congress in Santo Domingo de Guzman, National District, capital of the Dominican Republic, on theG/SCM/N/74/DOM
Page 15
eight of November of the year nineteen eighty-n ine, 146th year of Independence and 127th year of
Restoration.
Luis José Sánchez
President
Aminta Velásquez de Pérez
Secretary
Roberto A. Acosta Angeles
Secretary
PASSED in the Hall of sessions of the Senate in the Palace the National Congress in Santo
Domingo de Guzman, National District, capital of the Dominican Republic, on the tenth day of
January of the year nineteen ninety, 146th year  of Independence and 127th year of Restoration.
Francisco Ortega Canela
President
Juan José Mesa Medina
Secretary
Salvador A. Gómez Gil
Secretary
Joaquín Balaguer
President of the Dominican Republic
In the exercise of the powers conferred upon me by Article 55 of the Constitution of the
Republic,
PROMULGATE the present law and order that it be published in the Official Gazette to be
known and obeyed.
SIGNED in Santo Domingo de Guzman, Naational District, capital of the Dominican
Republic, on the fifteenth day of January of the year nineteen ninety, 146th year of the Independence
and 127th year of Restoration.
Joaquín Balaguer.
__________