Dominican Customs Law 3489, of February 14 of 1953 and its amendments, contains the customs regime of the Dominican Republic (DR). The last amendment to Law No. 3489 was made by the Law No. 226-06, which grants legal personality and functional, budget, administrative, technical autonomy and its own patrimony to the Dominican General Customs Administration (DGA).

The DGA is the entity in charge of the collection and administration of all the taxes and tariffs related to the international trade and the trade agreements treaties signed by the Dominican Republic. Among its main powers is to comply with and enforce the tax provisions arising from the Constitution, the international agreements, laws, decrees, resolutions and other tax rules, as well as efficiently administering the customs regime, exercising the powers granted by Law No. 3489 and its amendments and the other legal provisions affecting the scope of its competencies.

The DGA Is also responsible for preventing illegal tax acts and to apply administrative sanctions, collect tax debt, whether voluntarily or by exercising its powers of tax fiscal enforcement, being able in that aspect, to re- liquidate and collect duties and taxes that for any concept are owed to the Tax Administration within a two- year term counted from the date of the definitive payment.

1.2 Determination of the customs tax obligation

The General Customs Administration has established the system for self- determination of the customs tax obligation. Through this system, the taxpayer of the customs tax obligation (importer, consignee, customs agent or broker) has the power to set, by itself, the quantity of the customs tax obligation. The above means that the taxpayer acknowledges the imported merchandise and proceeds to its tariff classification and establishes the tax to be paid taking as reference the taxable base, proceeding with the payment of the liquidated taxes and communicating this operation to the DGA.

Notwithstanding the above, by virtue of the power of verification, recognized under Law No. 3489, the DGA has the power to review the assessment made by the taxpayer, based in methodologies of risk- analysis, being able to amend the assessment if it finds any discrepancy between what has been declared and what has been verified.

1.3 Declaration, Recognition and Dispatch of Goods

The customs declaration constitutes the voluntary act through which the consignor or consignee of the goods submits them for dispatch to a customs regime. With the declaration, the taxpayer states, freely and voluntarily, the customs regime to which the goods will be submitted to and the acceptance of the obligations that such customs regime imposes.

Article 51 of the Law No. 3489 establishes that within four days after the arrival of the vessel or means of transportation, the importer or consignee of the goods shall present to the Customs Administration, jointly with the declaration of imports, the original of bill of lading and commercial invoice, accompanied by four manifests, drafted in Spanish language, in clear and legible text in the corresponding forms.

Today, the processes for customs declaration are made through the SIGA System pursuant to the Norm for the Application of the Law of E- Commerce to Customs Procedures and the DGA Norm 01-12 which regulates the Presentation of the Customs Electronic Declaration. With this Declaration the customs destination is formalized.

The import declaration shall be supported by the following documents: (a) commercial invoice; (b) transportation documents, such as: bill of lading, waybill, air waybill or other equivalent document; (c) customs declaration of value of the goods, if applicable ; (d) certificate of origin of the goods, when necessary; (e) licenses permits or certifications to which the goods are subject to, and other required authorizations by reason of their nature and the customs regime to which they are destined.

In the event, that the due date established for the declaration of goods is not complied with, article 52 of Law No. 3489 establishes that an overcharge of 3% monthly for the first month or fraction of the first month will be applied and an overcharge of 5% monthly for each month or fraction of month after the first month over the real value of the goods.

With respect to the recognition of the goods, article 69 provides that the act of recognition will encompass: (a) the verification or exam of the goods; (b) their weight , account of measure; (c) its value; (d) its classification within the customs tariff schedule; and (e) the liquidation of the owed taxes or of those of which it were eventually exempt.

Finally, an inspecting official shall validate the results of the recognition, may introduce the pertinent amendments and shall notify the interested party, who will have a term of five labor days to pay all of the liquidated taxes and two labor days from the passing of the deadline above, to withdraw its goods.

1.4 Liquidation, Collection and Payment of the Goods

Article 7 of Law No. 146-00 of Tariff Reform provides that the liquidation of the customs duties shall be made over the taxable base of the CIF value (Cost, Insurance and Freight), expressed in national currency to the official rate of exchange for sale determined by the Central Bank of the Dominican Republic, pursuant to the information of the exchange market existing on the date in which the taxable event provided by Law occurs.

After conclusion of the process for the recognition of goods mentioned in article 69 of Law No. 3489, the results of the same shall be notified, so that within the term of five labor days it proceeds to the payment, in cash or through certified check, of all of the liquidated taxes.

Likewise, for the liquidation of owed duties, it is important to note that article 7 of Tariff Reform Law No. 146-00 prohibits the establishment of any taxes that result in the administrative imposition of taxes over international trade.

1.5 Violations and Administrative Sanctions

Article 94 and 195 of Law No. 3489 provide that the importers, exporters and consignors may incur in violations, sanctioned with fines for not declaring the cargo import, by not providing the commercial invoice, not withdrawing the goods within the terms provided, by incurring in errors in valuation, quantity or weight of the goods declared in the manifest and by not presenting or not including the minimum data required for bills of lading or general manifest, among others.

On its part, article 196 of the Law No. 3489 commands the confiscation of goods and means of transportation linked to the commission of the felony of contraband typified in such law.

In the same manner, if the inspection reflects more goods than those declared in the invoice, the amount subject to tax or the quantity in excess shall be added to the manifest and the duties collected and shall impose to the importer a fine of twice the amount of taxes over the goods.

Likewise, if what is found in the inspection is of a material, composition, mix, elaboration or structure different to that declared, in addition to the fine of confiscation, a fine equal to twice the amount of taxes over the total of the bags confiscated shall be imposed.

1.6 Recourses

Article 114 of Law No. 3489 provides that in the event that the consignee is not in agreement with the liquidation, it shall, within a term of 5 days counted from the notification of the same, present the objections or claims that it deems appropriate.

In addition, Article 116 of said Law provides that if the consignee is not in agreement with the decision rendered by the Customs Administrator, it may claim to the General Director of Customs within the term of 10 days, counted from the notification of the decision. If the importer is not in agreement with the decision of the General Director of Customs, it may appeal such decision before the Tax and Administrative Claims Court, subject to the rules and terms established under the Tax Code and its amendments, such as Law No. 13-07.

1.8 Violations and Criminal Sanctions

Article 167 of Law No. 3489 defines the felony of contraband as the introduction or exit from the Dominican Republic territory, as well as the internal transport, the distribution, the warehousing, or the public or clandestine sale of goods, implements, products, items, machinery, material repair parts, raw materials, objects and articles with commercial or artistic value that have been passed through or not through customs, in complicity or not with any officer or authority, without having complied with all the requirements nor satisfied the total payment of duties and taxes provided by import and export laws. Also, the Law establishes that the trafficking of exonerated goods, without previously fulfilling the requirements of the Exonerations Law for the sale of the same, shall be considered as felony of contraband.

The goods seized from contraband shall be sold on public auction and the income shall be used to pay for the expenses of the process, the taxes owed and the remaining amount shall go to the Public Treasury. Should there be no condemning ruling, damaged taxpayers shall be indemnified by the DGA up to the amount of the customs value of the goods plus the taxes paid.

The contraband includes sanctions of seizure of the goods subject of the contraband, the means of transportation or objects used in the violation, items purchased with the benefits obtained from contraband, a fine of twice the unpaid duties and taxes and prison from 2 to 5 years.

In case of repeat offenders, the sanctions of prison and fine increase from 3 to 10 years, to three times the unpaid taxes and duties and three times of the amount when it relates to goods whose entry or exit from the country is prohibited.

The third or subsequent violations carry a sanction of longer imprisonment and four times the amount of the unpaid duties and taxes, if they are goods whose entry and/or exit is prohibited.

The entry or exit of the country with undeclared amounts above of US$10,000.00 or its equivalent in Dominican currency is considered as contraband, without prejudice of the sanctions that may apply for violation of Law No. 72-02 against laundering of assets originating from illegal traffic of drugs and controlled substances.

The DGA may apply the criteria of opportunity consisting in requesting the Public Ministry to discontinue the public action initiated for a customs violation, as long as the person declares itself guilty, is not repeat offender, pays the fines and accepts the seizure of the goods.

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ABOUT THE AUTHOR: Dr. Felipe Isa Castillo is a Partner leading the Foreign Investment, Real Estate & Tourism areas at Arthur & Castillo Law Firm and Attorneys in the Dominican Republic. He specializes in foreign investment, real estate and international business (International Legal Studies LLM in Georgetown University Law Center in Washington, D.C. & Masters in International E- Business in Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience in Foreign Investment, Free Trade Zones, International Business and Cross Border Real Estate practice. Dr. Castillo is a Certified Bankruptcy Conciliator and Liquidator and Legal Interpreter.

Email: [email protected]

Disclaimer: This publication is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. For specific technical or legal advice on the information provided and related topics, please contact the author.

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