Anti-Corruption 2019 Second Edition

Last Updated December 09, 2019

Dominican Republic

Law and Practice

Authors



Medina Garrigó Abogados (MGA) is a boutique law firm founded in the Dominican Republic by Fabiola Medina Garnes in 2004, under the name Medina Garnes Asociados. Since its inception, the firm has acquired extensive experience assisting clients in handling legal matters in the areas of telecommunications, administrative law, taxation, litigation and alternative forms of dispute resolution. Additionally, following a strategy of careful and steady growth, MGA has been able to develop a broader and comprehensive practice, including white-collar, labour, employment and social security and constitutional law, among other traditional areas of practice.

The Dominican Republic is a party of the Inter-American Convention against Corruption signed on 29 March 1996. This convention was ratified by the Dominican Congress on 1 November 1998.

Likewise, the Dominican Republic is a party of the United Nations Anti-Corruption Convention, this international instrument was ratified at the National Congress on 26 October 2006. 

There is no main national legislation like there is in other jurisdictions relating to anti-corruption. There is a very simple anti-bribery legislation that was enacted in 2006 as one of the obligations as a country that is party to the conventions referred to in 1.1.1 International Conventions

All relevant offences related to corruption are spread over different sources. Although there is not a main instrument regulating bribery and corruption in the jurisdiction, different legislative pieces in the Dominican Republic contain dispositions on this matter. Article 146 of the Dominican Constitution condemns all forms of corruption within the organs of the State. Likewise, the Constitution set forth principles of good administration and transparency that rule the activities of particulars with the Administration.

Legislation containing dispositions on bribery and corruption are Law No 448-06 on Bribery in Commerce and Investments enacted on 6 December 2006; Law No 41-08 on Public Service, which creates the Ministry for Public Administration of 25 January 2008; and the Penal Code of the Dominican Republic, enacted in 1884, with few amendments. 

There are no guidelines on the interpretation and enforcement of the above-mentioned legislation. Case law on the matter has also been limited. In any case, criminal rules are to be interpreted restrictively. Any interpretation shall be to the benefit of the accused.

There are no recent amendments on the national legislation.

Bribery

The Dominican Criminal Code includes the crimes of bribery applicable exclusively to Dominican public officials or employees – whether administrative, municipal or judicial – who receive gifts to perform acts within their functions. However, in 2006, the crime of bribery was regulated in Law 448-06 on Bribery in Commerce and Investment.

This Law sanctions both the individual or the private entity that offers bribes, as well as sanctioning the public official or person who performs public functions that requests or accepts either goods or benefit for himself, herself or another person, in exchange for performing or omitting any act of its functions, in matters that affect national or international trade or investment.

Violators will be punished with imprisonment from three to ten years and sentenced to pay a fine of double the rewards received or requested without, in any case the fine could be less than 50 times the minimum wage. The same penalty applies both to those who offer or deliver a bribe and to those who receive or solicit one.

In some cases, with aggravating circumstances, punishment also includes disqualification from certain functions or professions, in the case of an individual, and the closure of or intervention in legal persons for a period of five to ten years or the definitive closure, and an increased fine of not less than 100 times the minimum wage, in the case of reoccurrence. 

The confiscation of valuables and objects offered in bribery in favour of the Dominican State will also be provided. Complicity in cases of bribery provided for in the Law will be sanctioned with the same penalty that corresponds to the principal perpetrators.

There is not an explicit definition of a bribe in the Dominican Republic.  Article 177 of Penal Code indicates that any public officer who - by gift or promise - lends his or her ministry to perform an act that although fair, is not subject to salary, or for the same reasons omits to perform a lawful act proper to his or her position, shall be considered bribery.

Article 2 of Law No 448-06 indicates that any public officer or person that requests or accepts, directly or indirectly any article of monetary value, or other benefit, such as promise or advantage, for the public official or any third person, in exchange for any act or omission, in the performance of that official’s public functions, regarding issues that affect international trade or investments will be considered as committing bribery. However, it is important to point out that the provision refers only to the matters that affect national or international trade and investment.

The receipt of a bribe is considered an offence pursuant to dispositions of Article 166 and 178 of the Dominican Criminal Code and Article 2 of Law No 448-06. The scope of application of Law No 448-06 as stated above is only in national and international trade and investment.

The relevant test is the existence of a payment or any type of benefit in favour of a public officer in exchange of an advantage. One of the main element of the offence is the existence of an intent to make such an offer or promise in exchange for any act or omission. Law No 448-06 does not requires the commission of the act by the public officer, the intentional offer or promise made by a perpetrator is sufficient to consider the existence of the crime.

Attempted bribery is considered an offence, even though its punishment is less grave according to Article 179 of the Dominican Penal Code.

There is not any specific legislation regarding hospitality or promotional expenditures or to what extent these actions may be considered as a bribe. However, any type of gifts pursuant to the dispositions of the above-mentioned legislation may be considered under the scope of anti-corruption and anti-bribery regulation.

The failure to prevent bribery is not considered as an offence pursuant the legislation in the jurisdiction.

Dominican law does not establish a specific obligation to prevent bribery or the trafficking of influence, as is the case with other crimes (for example, the compliance obligation for money laundering). Notwithstanding this, the crimes of administrative corruption, such as bribery of public officials, constitute a precedent offence for the definition of money laundering. Nor is there a regulation that requires individual or entities to maintain and implement a compliance programme specifically to prevent national or transnational bribery. However, under the compliance programme required by the Anti-Money Laundering Act, there is an obligation to identify politically exposed persons (PEP), defined as “any individual who performs or has performed, during the last three years, high public functions, by election or executive appointments, in a foreign country or national territory, including senior officials of international organisations”. This due diligence extends to the spouse, partner and the persons with whom the PEP maintains a relationship by consanguinity or affinity up to the second degree, as well as close associates.

On the incentives for reporting bribery acts (whistle-blower protection), the same law on bribery in trade and investment establishes that persons who denounce the acts described in the law in good faith will be duly protected by the Dominican authorities.

Article 1 of Law 448-06 defines a public officer as any officer or employee of the national government who has been designated or elected. Article 4 y 18 of the Public Administration Law establishes that public officers are, by their relationship of employment, at the service of the organisms and entities of the Public Administration. Article 4 of Law 41-08 defines the public officer as the Person holding a permanent position in the public service, designated by the Minister of competent authority.

Article 4 of Law 448-06, establishes as a crime of bribery the fact that any person offers, promises or grants objects of pecuniary value or other benefit to a foreign official. In other words, any public officer subject to Dominican law, who offers bribes to another, whether foreign or national, would be considered to have committed an offence.

The regulation in the jurisdiction does not provides specific regulation in regard to bribes committed between private parties.  However, if payments within companies come from illicit activities, the action will be under the scope of the new Money Laundering Law, Law No 155-17. Accordingly, the action in such a case may be subject to the dispositions of money laundering.

In addition, if the bribe is accepted by an employee, the action will be considered a dishonourable act and there will be a valid reason to terminate the labour contract, pursuant to the disposition of the Dominican Labour Code.

Illegal enrichment

According to the provisions of Law 311-14, the crime of illicit enrichment is configured as a mechanism aimed at proscribing corruption. This crime has penalties of up to ten years and, in a complementary and obligatory manner, disqualification from holding public functions for an equal period of time.

Influence-peddling

Influence-peddling is not explicitly regulated as a crime in Dominican legislation. However, Article 128 of our Criminal Code establishes that public officials who exceed their powers and interfere with other public officials, either require, instruct or make recommendations to the judicial authorities to adjust their actions, decisions or judgments to their interest will be held responsible.

The Dominican Republic's Criminal Code only addresses the influence-peddling of local public officials.

Financial Record-keeping

There is an obligation to keep books or special records of their negotiations and operations and to maintain and show them as a way to monitor tax compliance for a period of not less than ten years. Failure to comply with this obligation is not a criminal offence, but it is an administrative offence that is sanctioned by the tax administration. 

Failure to comply with formal duties will be sanctioned with a fine of five to 30 times the minimum wage, regardless of the accessory penalties of suspension of concessions, privileges, prerogatives and activities or closing of premises, according to the aggravating circumstances of the case.

In addition, Article 15 of Law 311-14 establishes as an offence anyone who, by reason of his or her position, is obliged by law to present a sworn statement of assets. 

Article 43 of this law indicates that there is an obligation to keep registrations of accounts or payments for at least ten years.

Pursuant to dispositions of Law No 155-17, accountants are considered as non-financial subject parties with an obligation to report activities, including suspicious payments such as bribes. Article 43 of this law indicates that there is an obligation to keep registrations of accounts or payments for at least ten years.

Public Officials

Public officers who request the collection of amounts and values that are not actually owed, or who demand or receive sums that exceed the legal tax, shall be sanctioned for misappropriation. This is stipulated in Article 174 of the Penal Code.

According to the provisions of Article 175 of the Penal Code states that any public officer who, openly or by the simulation of acts or by the interposition of a third party, receives an interest or reward, not provided for by law, in adjudications or acts whose administration or supervision is entrusted to his or her charge, shall be considered a criminal offence.

According to Article 171 of the Criminal Code. Embezzlement of public funds will be considered the lack, negligence or refusal of any public official or public employee to deposit or remit funds, when required, or to return the balances requested.

Any public official public employee convicted of embezzlement, in accordance with the provisions of Article 171, shall be punished with a fine not less than the amount embezzled and not more than three times that amount and with the penalty of imprisonment. However, if, before the case has been reported to justice, the damage caused is repaired in any way or the money or the embezzlement effects are reinstated, the penalty shall be not less than one year in prison and the disqualification to carry out any public position for four years.

Law 340-06 on public contracting establishes that corrupt or fraudulent practices that establish restrictive practices of free competition will be a determining cause for the rejection of a proposal or the termination of a contract.

Intermediaries

Law No 448-06 forbids bribes in exchange of any type of benefit, whether personal or in favour of third parties. However, Article 179 of the Criminal Code does not include indirect bribery and bribery for the benefit of another person or entity. Accordingly, the application of bribe legislation to intermediaries is limited to national and international investment and commercial transactions.

The statute of limitations for bribes extends for a period equal to the maximum sentence, or one year where an offence is not subject to a penalty of deprivation of freedom.

Article 146 of the Constitution of the Republic provides that the law may provide for prescription periods of a longer duration than that for corruption crimes and a restrictive regime of procedural benefits.

Recently, in the judicial decision to send to trial in the Odebrecht corruption case, the judge pointed out that organised crime and offences related to the misappropriation of public funds are deprived of the benefit of the statute of limitations or are subject to extraordinary limits under Article 24 of the UN Anti-Corruption Convention. 

The scope of application of Law No 448-06 is also international commerce and finance transaction. Article 4 of this legislation forbids transnational bribery.

The Criminal Code of the Dominican Republic does not have any provision regarding corporate criminal liability. Case law has set forth that, whenever a corporation is prosecuted for an offence punishable with imprisonment, this penalty will be applied to its legal representative.

Law No 448-06 establishes criminal liability for legal entities. According to this law, a corporate may be liable and be punished with the temporary closure of commercial establishments, cancellation of permits and/or legal authorisations and withdrawal of their access to certain markets such as financial or stock markets.

It is very common to have criminal prosecutions against a legal entity and an individual at the same time. In most cases, the individual is pursued as the perpetrator of the offence and the legal entity as a defendant in a damage claim.

The person (company or individual) committing the bribe is liable. The legislation does not set forth dispositions regarding vicarious liability. The Criminal Code does not include provisions, in the event of a merger or acquisition, for successor entities to be held criminally liable for offences committed by target entities that occurred prior to the merger or acquisition.

This situation is contemplated in a draft reform of the Criminal Code that has yet to be approved. The Criminal Code reform has been discussed in the National Congress for the past two decades, but it will certainly be enacted in the near future. 

There are no specific defences to the above offences in addition to those that apply for any crime. In the Dominican Republic there is a constitutional principle that provides that a defendant is presumed innocent until proven guilty beyond reasonable doubt by the prosecutor. The most common defence in these cases is insufficient evidence or absence of evidence. In some cases, the defence will focus on reviewing technical errors of the investigation and/or the evidence collected.

As most white-collar prosecutions require specific investigation techniques and specialised knowledge, a number of defences attempt to reveal that the facts presented do not constitute an offence against the criminal law or that there is a lack of at least one of its constituent elements. 

There are no exceptions to the defences.

There are no de minimis exceptions for the offences referred to in 1 Offences.

There are no specific sectors or industries that are exempt for such offences.

There are no specific dispositions regarding any form of safe harbour or amnesty programme in matters of corruption acts. However, if a criminal investigation is initiated against a company or individual under alleged corruption act, the subject under investigation and the Attorney General Office may reached an agreement under the application of the opportunity criterion.

The “opportunity criterion” is applied when the suspect is willing to collaborate with the investigation providing essential information in order to help the authorities in avoiding or persecuting other crimes that may cause major impact in the civil society. This criterion was applied in a recent corruption case regarding the commission of corruption acts in the jurisdiction by the multinational Odebrecht. 

The penalties and sanctions are different, depending on whether they are applied to the person making the bribe or the public official that commits any act of corruption.

In regard to the public officials, Law No 41-08 provides the process of suspension of public officers in corruption cases. The criminal penalties will also apply if the public officer is considered guilty. These sanctions vary from a civic dishonour to imprisonment from one to five years. Article 179 of the Criminal Code indicates that individuals committing the bribe are subject to the same criminal sanctions.

Law No 448-06, however, provides that individuals and companies can be fined up to an amount of twice the gross of the reward offered. This regulation also provides criminal imprisonment for individuals from three to ten years.

The Dominican Criminal Procedure Code establishes rules and guidelines to determine the sanctions to be imposed on all crimes, including corruption and bribery.

The criteria expressly provided in the Criminal Procedure Code are:

  • the degree of participation of the defendants in the offence, their motives and their conduct after the fact;
  • the personal characteristics of the defendant, his or her education, economic and family situation, work opportunities and personal improvement;
  • the cultural patterns of the group to which the accused belongs;
  • the social and cultural context where the infraction was committed;
  • the future effect of the sentence in relation to the accused and their families, and their real possibilities of social reintegration;
  • the state of the prisons and actual conditions of compliance with the sentence; and
  • the severity of the damage caused to the victim, his or her family or society in general.

In the processes of deferred prosecution, non-prosecution agreements or guilty pleas, the same criteria are used for assessing the penalty as in trials.

There is no provision in the Dominican Republic related to the duty to prevent corruption.

Dominican society, through its authentically conformed entities with legitimate representation, has the right and obligation to contribute to the specialised entities in the prevention and investigation of corruption, as established in Article 7 of Law 10-04.

Article 9 of Law 448-06 establishes that persons who, in good faith, report acts described as corrupt shall be duly protected by the Dominican authorities. However, there are no specific protection measurements afforded to whistle-blowers, nor is a witness-protection programme in place in the Dominican Republic.

Law 488-06 on bribes, both within the territory and transnationally, establishes an obligation for the state to provide protection to whistle-blowers. Despite this, the Dominican Republic does not have any current protection programme for whistle-blowers in white-collar cases or any other type of crime, nor are there any particular incentives for reporting.

There are no incentives for whistle-blowers, unless they may also be part of the investigation. In that case, a participant in a crime who decides to report bribery or corruption may benefit with a non-prosecution agreement in exchange for information.

There are no relevant provisions that have actually been enacted regarding whistle-blowing.

The lack of enforcement of anti-bribery and anti-corruption laws is one of the major problems in the country. Although there is not a specific enforcement body regarding matters of corruption and bribes in the jurisdiction, there are different administrative bodies competent to know internally about corruption actions by public officers and to design policies in favour of transparency, as explained in 5.2 Enforcement Body.

There is a specialised body, part of the General Attorney Office in charge of the prosecution of administrative corruption, the Special Prosecution Office of Administrative Corruption (PEPCA). This body is in charge of initiating criminal actions in cases of corruption.

The Special Prosecution Office of Administrative Corruption (PEPCA) scope of work is limited to the persecution of criminal actions. Administrative sanctions against public officers are imposed by the public body where the public officer works. 

The Special Prosecution Office of Administrative Corruption (PEPCA) as part of the General Attorney Office has wide powers to conduct its investigation. Article 88 of the Criminal Procedural Code indicates that the General Attorney is in charge of the investigation and may practise or order any necessary action to determine the existence of the crime. In special cases and to perform specific activities (in order to guarantee the protection of constitutional rights such as property and intimacy) PEPCA will have to request authorisation from the competent court.

Within the administration, there are different bodies competent to prevent corruption and to design policies in favour of transparency, such as the Ministry of Public Administration and the Ethic Commission of the Presidency.

The prosecutor in charge of the investigation must make a request to the judge indicating the action to be performed (forceful entry, wire-tapping, among others).

The Attorney General has the faculties to apply an opportunity criterion, such as non-prosecution agreements, in certain specific cases with a person under investigation, if the suspect collaborates. This agreement shall be later authorised by a competent judge.

The Attorney General Office has national jurisdiction. However, it may request collaboration for similar international bodies in cases where transnational corruption occurs. The current Attorney General implemented this measure in a recent case where a transnational company committed corruption acts in different Latin American jurisdiction.

The Odebrecht case is the most recent landmark investigation involving bribery and corruption in the Dominican Republic. In June 2019, six public officials and one attorney were sent to trial in the Odebrecht bribery case. This investigation started in 2016; in 2017 a group of 14 individuals was initially prosecuted but only eight of them were included in the indictment.

There are no recent or current convictions for these crimes that allow the level of sanctions to be assessed. In fact, very few convictions have been imposed in the past. Nevertheless, there are a number of cases that are currently in process. These include the Odebrecht case, the OMSA case, and the Super Tucanos case.

The enforcement of the applicable legislation is officially been assessed. No recent report was available.

The Criminal Code has yet to be approved. The Criminal Code reform has been discussed in the National Congress for the past two decades, but it will certainly be enacted in the near future. 

Medina Garrigó Abogados (MGA)

Gustavo Mejía Ricart No.102
Esq. Abraham Lincoln
Edif. Corporativo 20/10
Suite 904
Piantini
Santo Domingo
Dominican Republic

809-683-4422

ldiaz@mga.com.do www.mga.com.do
Author Business Card

Law and Practice

Authors



Medina Garrigó Abogados (MGA) is a boutique law firm founded in the Dominican Republic by Fabiola Medina Garnes in 2004, under the name Medina Garnes Asociados. Since its inception, the firm has acquired extensive experience assisting clients in handling legal matters in the areas of telecommunications, administrative law, taxation, litigation and alternative forms of dispute resolution. Additionally, following a strategy of careful and steady growth, MGA has been able to develop a broader and comprehensive practice, including white-collar, labour, employment and social security and constitutional law, among other traditional areas of practice.

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