White-Collar Crime 2019

Last Updated October 21, 2019

Dominican Republic

Law and Practice

Authors



Medina Garrigó Abogados is known for its track record in high-profile and complex cases. Its white-collar practice is led by partners with wide experience in regulated-markets investigations and criminal defence. The team comprises two partners and two associates representing clients in criminal investigation and defence as well as administrative procedures initiated by regulatory bodies. Partners have a specific expertise in bank fraud, money laundering, shareholder litigation and corporate fraud. Other areas of expertise shared by the rest of the MGA team are tax-fraud litigation, cybercrime and computer fraud. All members of the department are also active in academia. Both partners have been involved in the implementation of the accusatorial system of the Dominican Republic and have actively participated in reforms to criminal justice legislation. Recently, MGA's white-collar department successfully participated in the defence of the former Minister of Industry and Commerce, who was prosecuted among other individuals in the well-known Odebrecht Case.

The main categories of criminal offence in the Dominican Republic are felonies (crimes), misdemeanours and minor infractions. The criminal code determines which of these three categories an offence falls into depending on the type of punishment and the term of imprisonment applicable. Felonies are the most serious crimes and are punishable with imprisonment of up to 20 years. Aggravating circumstances in some cases increase the penalty to 30 years. In the Dominican Republic the highest imprisonment term applicable to a specific offence is 40 years.

Misdemeanours are punishable with correctional imprisonment of six days to three years and fines. Minor infractions are the least serious offences and are punishable with one to five days imprisonment and/or fines.

Offences can consist of both a positive act and also an omission or failure to act. In the case of felonies and misdemeanours, an intent to commit the offence must be proven.

Regarding the attempt to commit an offence, an attempted felony is always punishable in the Dominican Republic by the same penalty that would apply in case of a completed offence. The attempt to commit a misdemeanour will be punishable if specified by law.

As a general rule, the statute of limitations for offences under Dominican Law is equal to the maximum penalty applicable to the specific offence. If it is not otherwise established in any specific law, this limitation period will never be higher than ten years or lower than three years for crimes punishable by imprisonment. In case of infractions punishable by a maximum of five days or punishable with sanctions other than imprisonment, the limitation is one year.

In the Dominican Republic some offences such as genocide, torture or forced disappearance are not subject to any time limitation. Since 2015 other felonies have been added to that list, including organised crime.

Statute of limitation terms begin to run, for consummated infractions, from the date of consummation; for attempts, from the day the last act of execution was carried out; and, for continuous or permanent effects, from the day on which its continuation or permanence ceased.

Prescription starts, is suspended or interrupted individually for each of the subjects who intervened in the infraction. In cases of joint prosecution of several infractions, the respective criminal actions resulting from them prescribe separately in the terms indicated for each one.

As a general rule, prosecutors and courts have extraterritorial jurisdiction to investigate, prosecute and punish white-collar offences committed outside the Dominican Republic if those offences had an impact or a result in its territory..

The Criminal Code of the Dominican Republic does not include the possibility of companies being held criminally liable. However, most recent legislation concerning white-collar offences includes specific provisions establishing criminal liability for legal entities. 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.

Corporate crimes included in Corporate Law 478-09 could be committed by legal entities. That law establishes a general rule for corporations, according to which they may 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 a natural person at the same time. In most cases, the natural person is pursued as the perpetrator of the offence and the legal entity as a defendant in a damage claim.

Corporate Law 478-09 provides that the managers or directors of a company will be held responsible, directly, for criminal offences committed by the company. However, Dominican Republic legislation requires the active participation of manager or director in the offence.

Besides the criminal responsibility that can be assigned to natural persons who are personally involved in the commissions or omissions indicated in the case, legal persons can also be held responsible for infractions defined in the Corporate Law. They can be punished directly with one or more of the following penalties:

  • temporary closure for a period not exceeding three years for one or more of the commercial establishments operated by the company, or part of its commercial exploitation, or its legal dissolution;
  • temporary revocation for a period not exceeding five years, or definitive revocation, of any legal authorisation granted by the public authority for the provision of the commercial activity, without considering the nature of the qualifying title, whether by concession, licence, permit, authorisation or any other; and
  • temporary disqualification for a period not exceeding five years, or definitive disqualification, from making a public call for savings in the financial, stock market or commercial sectors.

The Criminal Code and the Corporate Law do not include provisions, in the event of a merger or acquisition, for successor entities being 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 is 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. 

Any victim, affected by a crime, who has initiated a criminal action may claim compensation for loss or damages suffered. They will need to prove the existence of the damage and that the loss or damage was caused by the specific accused party. The victim can also sue a legal entity for damages caused by one of its employees during their work hours and/or in an action related to their job in that company. 

These claims can be made in criminal courts as an accessory to the prosecution of the relevant offence, or independently before civil courts, after a criminal procedure has ended.

Class actions are not admitted in the Dominican Republic because each individual victim is considered part of the procedure and has to be present or represented individually by an attorney during the process. However, in cases affecting collective or diffuse interests related to the conservation of ecological balance, fauna and flora, the protection of the environment and the preservation of the cultural, historical, urban, artistic, architectural and archaeological heritage; associations, foundations and other incorporated entities, whose purpose is directly linked with those interests, can be constituted as plaintiffs and claim for damages.

The most important development in white-collar criminal law is the proposed reform to the Dominican Criminal Code. The code was enacted in 1884 and has not had many transformations or amendments. This proposed reform was approved by National Congress in 2014. This draft represents a deep review of offences and penalties, updating some and incorporating new ones. Once approved by both chambers within Congress, the bill was vetoed by the President and unfortunately could not complete the constitutional procedures necessary to be enacted. Since the presidential veto was focused on specific aspects of the code (not concerning white collar offences) it is reasonable to say, that once enacted, all related regulations will be applicable as they were approved by Congress in 2014.

The reform is specifically relevant to legal entities since it establishes:

  • Legal entities liability – legal entities will be criminally liable for the acts or omissions of their bodies or representatives, where those acts or omissions were intended to benefit the company.
  • Liability of the legal entity without identifying the natural person – legal persons will be criminally liable even if it is not possible to establish the identity of the acting natural person, even if he or she has died or disappeared.
  • No exclusion of liability of a natural person – the criminal liability of legal entities does not exclude prosecution of a natural person for his or her own responsibility in the same events, whether as an author or accomplice.
  • Subsistence of criminal liability of the legal entity – the criminal liability of legal entities will remain even after their dissolution has been declared by the competent authority, as well as after any merger or acquisition.
  • Extension of the liability of the legal entity – when there are several legal entities involved, the criminal responsibility extends to the legal entity that maintains the legal or factual control of the one who committed the offence.

Another development related to white collar offences is the Money Laundering Law 155-17. This law enlarges the list of predicate offences for money laundering, including tax evasion, establishes some obligations in terms of compliance programmes for certain sectors of the economy and expands the list of types of offences. During the past two years, regulatory and enforcement authorities have been very active, preparing themselves for a full enforcement of the law. 

Also important were the Security Market Law 249-17, updating some and adding other offences and Law 17-19 on the Elimination of Illicit Commerce, Smuggling and Counterfeit Regulated Products.

In the Dominican Republic there is no special authority to pursue white-collar offences. Prosecution and enforcement of white-collar offences are not different to any other offence. The authorities in charge of the prosecution are “public prosecutors” and they are part of the Attorneys General’s Office. Public prosecutors are appointed in the different districts nationwide and in some cases are appointed to specialised units.

The larger Districts Attorney’s offices divide their cases according to the type of offence involved. In some cases, they also have specialised units to prosecute more complex and also specialised offences. Among those specialised units are anti-money laundering, tax fraud, cybercrimes and computer fraud, intellectual property and administrative corruption.

Most legislation regarding white-collar conduct also include provisions that incorporate administrative penalties, regardless of the criminal charges or liability that any entity or person could receive. Some of the authorities that regulate certain sectors or activities, such as financial, tax, customs and other activities, have formed specialised police squads in co-ordination with public prosecutors.   

The National Police have specialised units for certain white-collar cases who work under the direction of the prosecutor in charge of the investigation. There are no specialised criminal courts for white-collar offences.

Criminal investigations are initiated with a complaint filed by any person who has information or by the prosecution when they have direct knowledge, such as facts reported in the news.

In the case of white-collar crime, depending on the severity of the effect on public order, offences can be prosecuted through three different procedures, according to the Criminal Procedure Code or special laws that describe each offence: public action, public action promoted by a particular victim or private action.

Public Action

If, according to the law, the crime is of great public interest it will be pursued in the interest of the community, the prosecutor's office initiates the investigation procedure as a "public action" through its specialised departments and with the help of the authorities of the public administration and police bodies. In these cases, the victim's interest in participating in the process is not that relevant because the State will pursue the infraction according to its own parameters.

Public Action Promoted by a Particular Victim

Other crimes that involve more personal interests (such as corporate fraud or some cybercrime, scams and abuses of trust) are initiated and presented by the prosecutor in the interest of the victim, called "public action in a private instance".

In these cases, the prosecutor only starts if the victim drives the process and if he or she gives up, the prosecutor's office abandons the criminal prosecution.

Private Action

In crimes of pure private interest, the victim is the one who will be in charge of making the accusation independently and it will present its accusation without the participation of the public prosecutor. It will be assisted by the courts only where there is evidence that it cannot obtain on its own.

According to Dominican Republic criminal procedures, someone will be considered a victim if:

  • they are directly affected by the offence;
  • in cases of offences resulting in death, or where it is impossible for the directly offended to present the claim, they are the spouse or partner, biological or adoptive children or parents, or relatives within the third degree of consanguinity or second affinity of the victim; and 
  • they are partners, associates or members of a legal entity, regarding offences that affect such an entity, committed by those who administer, manage or control the company

The public prosecutor is the head of the investigation and has the power to enforce its orders with the assistance of police officers, who he or she can designate and separate from the investigation.

The authorities have the power to request information from any person that may or should have such information. The delivery of the information requested is mandatory. In the case of a refusal to do so, a judge may authorise the prosecutor to enforce the recovery of the document or information.

The authorities also have the power to issue a summons order to interview any person who should have relevant information for the investigation. If the person is served with a summons and fails to appear, the prosecutor may request an arrest warrant that will be valid until the interview is completed. The prosecutor can raid a company and seize documents under a court order, except in the of case of flagrant offence.

Search warrants will be issued to enter a private building such as an office or a house.

Internal investigations that may be conducted by companies through their corresponding security departments are considered and admitted by prosecutors and will be admissible as evidence by criminal courts, according to what is established by the Dominican Republic's freedom of evidence principle. However, those investigations will never be an adequate substitute for the investigation that must be performed by the public prosecutor and other enforcement agencies.

The Dominican Republic is a signatory to several international agreements and bilateral and multilateral legal instrument with respect to mutual assistance and cross-border co-operation in criminal matters, including extradition treaties.

Our Criminal Procedure Code establishes that judges and the public prosecutor must provide maximum co-operation to requests received from foreign authorities, provided they are formulated in accordance with the provisions of international treaties and our local law.

In cases of urgency, the judge or the public prosecutor, if they are considered reasonable, may enforce and execute, by any means, co-operation requirements from any judicial or administrative authority, in which case it will subsequently inform the Ministry of Foreign Affairs.

The Dominican Republic provides cross-border co-operation mainly to collect evidence, enforce judgments from other jurisdictions, transfer prisoners for the execution of judgments in their own country, and also for extradition.

Regarding extradition, this procedure is authorised for white-collar offences in the Dominican Republic if the applicable legal instrument allows it, according to the severity of the offence. In general terms, the Criminal Procedure Code establishes that, according to the Dominican Constitution, international agreements between states regulate the specific procedures for the extradition of their nationals.

When there is no international treaty or convention, the requested state is entitled to agree on extradition, but it is not obliged to grant it. However, the aforementioned obligation is not absolute because the requested state always retains the sovereign power of not granting the extradition if, according to its domestic legislation, the requirements established for this purpose are not met. In any event, the Criminal Chamber of the Supreme Court of Justice has jurisdiction to decide about a petition for extradition from a foreign state. 

White collar prosecutions do not differ from any other kind of prosecution considering the difference between public or private action explained above, see 2.2 Initiating an Investigation. The prosecutor may dismiss an investigation on specific grounds established by the Criminal Procedure Code, such as:

  • lack of evidence to verify the occurrence of the offence;
  • when there is a legal impeachment to pursue the criminal action;
  • when the perpetrator can’t be identified;
  • when the evidence collected is not sufficient to sustain an indictment;
  • if a justifying event occurs or the person cannot be held criminally liable;
  • if it is clear that the fact does not constitute a criminal offence;
  • the criminal action has been extinguished; and
  • the parties have reconciled.

For those cases where perpetrators and the state desire to use an alternative dispute resolution mechanism, Dominican criminal law provides an abbreviated criminal procedure, in which a fast judging process can be used for crimes with penalties equal to or lower than five years so long as the accused accepts the charges and agrees on the type of penalty and the amount of the compensation.

Criminal procedure legislation contains alternative mechanisms for conflict resolution that can be applied to white-collar crimes. These mechanisms can be used during the investigation process and be later on homologated by the judge or they can be used during a trial. All agreements reached on white-collar crimes must be ratified by the competent trial court.

In Dominican Republic legislation it is possible to accept the charges and reach an agreement with the accusing body. The accused may reach an understanding on the penalty to be applied before the trial or during it. The accusing party's capacity to negotiate is described in the Criminal Procedure Code which determines the circumstances in which an agreement can be reached and the minimum and maximum amounts authorised for negotiation of the penalty.

In the Dominican Republic, the General Law on Commercial Entities, Limited Liability Entities and Individual Enterprises with Limited Liability 479-08 regulates penal crimes due to corporate fraud. In this matter, there are two important classifications of crime, those that are followed by the state on the basis of public interest (public action), and those crimes of exclusive private interest, where the affected must pursue legal proceedings (private action).

In our legislation, public action is contemplated for crimes related to partnerships and publicly subscribed corporations subject to the regulation of the Superintendence of Securities (SV). Existing crimes are pursued through public action and can be sanctioned by up to five years of imprisonment, and fines from ten to 100 times the minimum wage. These crimes include:

  • declaration of false information for approval by the regulating authority;
  • obtaining savings or loans through public issuance of obligations, or placement and negotiation of securities instruments without the approval of the regulator;
  • imposition of obstacles to inspection or control of the regulator;
  • disrespect to the conditions, terms, deadlines or corrective measures, ordered by a regulatory audit intervention;
  • breach of the regulator's adjustment plan;
  • distribution or reproduction of prospectus of financial instruments with false information;
  • issuance of corporate obligations with non-existent benefits, determined at random, through raffles or any other mechanism without authorisation of the regulator;
  • no communication to the regulator of calls, general or special meetings of shareholders, as well as any corporate documentation; and
  • false facts declared in corporate documents.

Alternatively, corporate crimes highlighted in this Law in relation to private corporations, refer to infractions such as:

  • distribution of dividends in the absence of accumulated benefits;
  • presentation of financial statements or annual management reports with false information;
  • obstruction of internal management investigations;
  • use of funds or social assets for personal purposes or other improper benefit;
  • use of social powers or business opportunities, to the detriment of the entity, for personal or third-party gain; and
  • impeding the participation of a shareholder, or usurpation of duties of a shareholder;

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 natural person 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 being less than fifty 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 natural persons, 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 time the minimum wages, in 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.

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 natural persons or entities to maintain and implement a compliance programme specifically to prevent national or transnational bribery. However, under the compliance programmes 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 organizations”. This due diligence extends to the spouse, partner and the persons with whom the PEP maintains a relationship by consanguinity or affinity until 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.

Criminal Offences in the Stock Market - Penal Infractions in Stock Markets

This area is regulated by Law 247-17 which provides for a system of administrative sanctions for acts that violate the Law, and criminal sanctions for events considered more serious. Administrative sanctions will be applied according to the seriousness of the fault and may be fines, suspension of activities or negotiation, revocation of the authorisation to operate and exclusion from the Registry and disqualification.

As for criminal offences, they will be punished with a penalty of three to ten years in prison, as well as with the payment of fines of 100 to 500 times the minimum salary corresponding to the financial sector, to persons linked to the regulator or to regulated entities that:

  • spread false rumours or organise defamatory campaigns related to demonstrations, arbitrators of stocks or any other market participant that compromises market stability; or
  • disseminate or disclose privileged, reserved or confidential information about the operations of the stock market or about the matters communicated to the regulator or take advantage of these for personal gain by doing operations, by itself or through another person, on offer of public stock.

Similarly, regulated entities that participate in the market, will be sanctioned when they:

  • destroy, alter, deface or hide data or records, systems, physical or electronic documents, books, statements of account, correspondence or other documents or that allow the performance of these acts and omissions to obstruct the control of the regulator;
  • develop, approve or present an adulterated or false financial statement or balance, or that covers up the real situation of the relevant legal or physical person;
  • omit the accounting in the operations carried out or alter them to hide the true nature of operations performed;
  • register or order that false data be recorded in the accounting; or
  • provide false data or omit data in documents that must be submitted to the regulator or the general public.

Likewise, this Law sanctions those natural or legal persons who operate in the market without having the proper authorisation from the competent authority, or who participate in acts of market manipulation in the terms established in this law.

Deviation of Goods Collected from the Public

Persons regulated by the Law who have made use of goods or values received from a client, for purposes other than those ordered or contracted by the latter, commit a crime and will be punished with a penalty of five to ten years in prison.

Disclosure of False Information

The disclosure of false information about securities; or, with respect to an issuer, information which is known or should be known; the hiding or omitting of the disclosure of relevant information or events, which should be disclosed to the public or shareholders or holders of securities; and participation in the market without proper authorisation are crimes punishable with prison terms of two to five years.

Bank Fraud

Monetary and Financial Law 183-02, describes the infractions that operators and actors in the banking and financial sector may incur in its criminal penalties chapter. The penalties for the main infractions correspond to fines of USD10,000 to USD50,000 and penalties of three to ten years in prison for the commission of any of the following acts:

  • disseminating false rumours or the organisation of defamatory campaigns related to the liquidity or solvency of a financial intermediation company and the stability of the exchange market;
  • disseminating or disclosing of confidential information on the monetary and financial administration of an entity, or on matters communicated to it, or the use of such information for personal gain; or
  • altering or hiding data or documentation to obstruct the control of the regulator, or to consent to these acts and omissions. 
  • preparing, approving or presenting an adulterated or false financial statement or balance, or executing or approving operations to cover up the situation of an institution.

On the other hand, in cases of financial entities that are subject to a dissolution process, the shareholders, directors, managers, officers and employees will have the same penalties if:

  • they recognise non-existent debts in order to fully expend the entity’s capital;
  • they simulate suspension, to the detriment of depositors and other creditors;
  • they commit, in their business, the goods received as a deposit; 
  • an act if administration or disposition of a good is performed, having knowledge of the resolution or dissolution of the entity; or 
  • payment to a creditor or depositor is performed, in prejudice of other creditors or depositors, within the thirty days previous to the resolution or dissolution.

Tax Fraud

The taxpayer commits this crime if he or she simulates, hides, and/or performs some manoeuvre or any other form of deception, aimed at deceiving the Tax Administration. This crime may have the purpose of achieving or facilitating total or partial evasion of taxes. The Tax Code set forth as cases of tax fraud, the following:

  • falsehood in ledgers, balance sheets, forms, manifests or other documents, which seriously influence the determination of the tax liability;
  • use merchandise or products benefited by exemptions or franchises for purposes (or by holders) other than those that correspond according to the exemption or franchise;
  • hide goods or encumbered effects, provided that the act does not configure contraband or appear as nationalised goods introduced temporarily;
  • circulate, as a merchant, manufacturer or importer, products without the seal or tag that they must carry;
  • violate a closing or established control measure, or theft, concealment or disposal of products retained under conservative measures; and
  • not paying, within the prescribed deadlines, the amounts withheld or collected corresponding to taxes.

Elaboration and Clandestine Trade of Products Subject to Taxes

The elaboration, trade, circulation or clandestine transportation, within the national territory, of products or merchandise for which the corresponding taxes have not been paid or of products for which the requirements demanded by tax laws or regulations have not been fulfilled is illegal. The law establishes the following cases:

  • manufacturing products subject to taxes without obtaining the permits required by law or with equipment of whose existence the Tax Administration is ignorant or that have been modified without their authorisation;
  • elaboration of taxed products using non-authorised raw materials;
  • manufacturing, trading, circulating or clandestinely transporting, within the national territory, products or merchandise that have not paid the corresponding taxes or fulfilled the requirements demanded by tax laws or regulations;
  • altering, destroying or adulterating products or modifying the characteristics of goods or encumbered effects, as well as the concealment, improper withdrawal, change of destination or false indication of their origin; and
  • destroying, breaking or damaging a lock or seal placed in any warehouse, alembic, room or building by the competent tax authority or, without breaking or damaging the seals or locks, opening said warehouse, deposit, appliance, room or building or part of these or in any way reaching their content without having the authority to do so.

Manufacture and Falsification of Species or Fiscal Values

This crime is committed by persons who, trying to avoid all or part of the payment of taxes, or wishing to take any other advantage, perform the following activities:

  • unduly forge, wash or misuse stamps, bells, sealed paper, labels, stickers, or manufacture them without the corresponding legal authorisation;
  • print, engrave or manufacture without legal authorisation matrices, clichés, plates, cards, dies, stamps, labels, stickers or other species or tax values; and
  • alter or modify the value or characteristics, legend or class of stamps, seals, labels, stickers or other forms valued or numbered.

Other Crimes

Article 244 of the Tax Code establishes that falsehoods in sworn-in declarations will be sanctioned as perjury.

According to the type of tax offence, persons can be sanctioned with:

  • imprisonment from six days to two years (Article 239);
  • confiscation of material property subject to the infringement or use to which it was put;
  • closure of the premises or establishment;
  • suspension and dismissal from public office;
  • disqualification from the exercise of trades and professions;
  • loss of concessions, privileges, franchises and incentives;
  • cancellation of licences, permits and registration in public records;
  • a fine of two to ten times the amount of the defrauded tax, without prejudice to any prison penalties that may be applied (Article 239); and
  • a fine of twenty to 200 times the minimum wage (Articles 243 and 241).

Taxpayers and responsible individuals within companies have an obligation to keep books or special records of their negotiations and operations and to maintain and show them as a way to monitor their 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 matters of competition, Dominican law contains administrative sanctions for collusion, abuse of dominant position and unfair competition. Law 42-08 sanctions price setting, market distribution or exchange of information between competitors, as well as restricted sales, imposition of resale prices, discrimination of suppliers, or other requirements imposed by a dominant company. These behaviours can be sanctioned with fines of 30 to 3,000 minimum wages. At the margin, unfair competition behaviour is only subject to civil compensation before domestic courts.

In domestic criminal law, the Dominican Criminal Code provides criminal penalties in defence of competition, beyond the imposition of administrative fines. The alteration of natural market prices, deceptive tactics, and the agreement between economic agents to limit the provision of goods and services to alter their prices, is sanctioned with prison sentences of one month to two years. Similarly, removing bidders from public auctions, or altering their free participation will constitute a criminal offence with prison from 15 days to three months.

With respect to Law 358-05, which protects consumers, there are provisions that refer to the responsibility that companies have when they provide a service or sell a product. It protects the right to life and health of consumers, education for the consumption and use of goods and services, the right to truthful, clear and timely information, the economic interests of the user, the adequate repair of damages suffered, access to diversity of offer and freedom of choice, and the right to free association and access to justice. This Law contains different types of sanctions for violations of minor to greater significance:

Minor infractions are simple irregularities in the observance of market regulations, without direct effects on the consumer or user. These are sanctioned with fines of up to 20 times the minimum wage;

Serious infractions are violations of health regulations, breaches of guarantee conditions, or partial refusal to provide information for, or collaboration with, inspections. These are sanctioned with fines of 20 to 100 times the minimum wage.

Very serious infractions include alteration, adulteration or fraud in the means or procedures for goods or services, the systematic shortage of provisions, application of prices that exceed the margins established by regulation, or the absolute refusal to provide information for or collaborate with inspections. These are sanctioned with fines of 100 to 500 times the minimum wage.

There are few criminal penalties that are related to consumers rights. The Dominican Criminal Code sanctions the sale of damaged, corrupted or harmful groceries, as well as the sale of counterfeit drinks, with penalties of one to three days in prison, and six days to one month in cases of reoccurrence. The new Law on illicit trade 19-17 includes some of the behaviours and penalises them criminally when it comes to goods and products whose sale is regulated.

Cybercrime in the Dominican Republic is regulated by Law 53-07 on High Technology Crimes. Identified crimes include:

  • crimes against the confidentiality and integrity of data (violation and cloning of access codes, access, use and exploitation of illegal data, access and benefit of third-party services, fraudulent devices, data interception or signs, data alteration and sabotage) which attract penalties ranging from three months to two years in prison and fines of three to 500 times the minimum wage;
  • content crimes (attacks on life, theft, obtaining funds, illicit transfer, scam, blackmail, phishing, document and signature falsification, invasion of privacy, illegal trade, defamation and insult, sexual assault and child pornography) which attract penalties ranging from three months to ten years in prison and fines of two to 500 times the minimum wage, except for the application of penalties for traditional crimes, such as homicide;
  • telematic crimes (fraudulent return calls, fraud of line for information service providers type 1-976, diversion or redirection of long-distance traffic, theft of lines, traffic diversion through routes not authorised to avoid or reduce payments that correspond to the nature of diverted traffic, illegal manipulation of telecommunications equipment and intervention in private centrals) which attract penalties ranging from three months to ten years in prison and fines of five to 200 times the minimum wage; and
  • crimes against the nation and acts of terrorism, punishable by penalties of 15 to 30 years in prison and fines of 300 to 2,000 times the minimum wage.

Law 17-19 was recently passed, for the eradication of illegal trade, which criminalises the smuggling and counterfeiting of products, such as medicines, hydrocarbons, alcohol and its derivatives or tobacco and its derivatives.

Illicit or illegal trade is the act of producing regulated products without obtaining the required permits or without complying with the applicable requirements or techniques. Likewise, the alteration or falsification of products and their commercialisation or the manufacture, supply, import or distribution of medicines without authorisation and sanitary permits or without paying the corresponding taxes.

Without prejudice to the confiscation of goods, products, vehicles and other effects used in the commission of the crime, as well as the closing of the premises or establishment; these violations will be sanctioned with fines of 100 to 200 times the minimum wage and imprisonment of three to five years or both, depending on the case. In the case of medications, the penalties will reach a maximum of ten years, as provided by the General Health Law and its modifications.

Smuggling

Smuggling will be sanctioned with a fine of 100 to 300 times the amount of the customs value of the smuggled goods and with imprisonment for three to five years. Even when it does not cause tax damage, it will be considered as smuggling if any person:

  • acquires, sells, donates, hides, uses, gives or receives in deposit, destroys or transforms merchandise of any kind, value, origin or derivation introduced into the country, avoiding customs control; or
  • replace goods from the transport units.

Accomplice

This law also includes sanctions with penalties of six months to five years in jail and fines of 100 to 300 times the minimum wage, for the conversion or other transfer of goods, knowing that they are the product of crime. Also the transport, acquisition or possession of goods resulting from crime.

Administrative Sanctions

The licences or permits of people who commit these crimes will be temporarily suspended automatically if, during the random inspections of compliance verification, it is shown that the fiscal records or controls or the quality or public health requirements have been altered, are not applied or have been falsified.

The penalties are a fine; temporary or permanent closure of the business, deposit or factory; suspension or definitive cancellation of licences, permits or concessions, authorisations or registrations; administrative confiscation of the merchandise; destruction of the merchandise; demolition of structures as well as the prohibition or permanent cessation of activities or works.

Alcoholic beverages, medicines and tobacco derivatives will be seized and destroyed publicly within 48 hours of the verification of the violation. In the case of hydrocarbons confiscated due to their unlawful origin, this will be in favour of the State who will determine their custody and the procedures for managing and assigning said fuels.

Under the Dominican Penal Code, concealment is not established as an autonomous criminal violation but, in some circumstances, it can be considered as a behaviour classified as complicity in the commission of a crime.

Some recent legislation establishes this criminal type of concealment, in the cases specially provided for in each specialised Law. This is the case of the Law on Money Laundering and the Law on Illicit Trade, Smuggling and Counterfeit Products among others.

In cases of concealment of offences such as illicit commerce, smuggling and counterfeiting of products and goods, a person will be held criminally responsible as an accomplice. This law includes penalties of imprisonment from six days to five years and fines of 100 to 300 times the minimum wage.

To establish concealment as a criminal offence it must be proven that the goods were concealed knowing that they were the product of crime.

In Dominican criminal law, the one who conspires or helps another to commit a corporate crime, as in the case of concealment in certain offences that expressly indicate it, is considered an accomplice of the crime and is punished with the penalty immediately below the one that corresponds to the author.

Law 155-17 defines asset laundering as a process by which natural or legal persons and criminal organisations, seek to give a legitimate appearance to goods or assets from illicit sources originating from previous crimes indicated by the law.

It also defines the preceding or determinant crimes as one that generates goods or assets that are subject to money laundering. The following are considered as preceding or determining offences: illicit trafficking of drugs and controlled substances; any offence related to terrorism and the financing of terrorism; illicit trafficking of human beings (including illegal immigrants); human trafficking (including sexual exploitation of minors); child pornography; procuring; illicit trafficking of human organs; illicit gun trafficking; kidnapping; extortion (including those related to recordings and electronic films made by natural or legal persons); forgery of currencies, securities or titles; scams against the state; embezzlement; bribery; traffic of influence; prevarication and crimes committed by public officials in the exercise of their functions; transnational bribery; tax crime; aggravated scam; smuggling; piracy; product piracy; crime against intellectual property; environmental crime; fronting; unjustified enrichment; forgery of public documents; counterfeit and adulteration of medicines, food and beverages; illicit traffic of merchandise, works of art, jewellery and sculptures, and aggravated robbery; financial crimes; high tech crimes and violations; misuse of confidential or privileged information and market manipulation. Likewise, any serious offence punishable by a penalty of not less than three years is considered as a preceding or determining offence.

To hold a person responsible for money laundering, it must be proven that the person had knowledge of the illicit origin of the funds to be used for lawful purposes.

The main crimes contained in the Law on Money Laundering are punishable by imprisonment for ten to 20 years. Advisers and accomplices of money laundering offenders will be punished with imprisonment of four to ten years.

Prevention of money laundering is an obligation to certain subjects called “obligated subjects” who operate in sectors identified as high risk. Obligated subjects may be prosecuted if they fail to comply with the obligations provided for these purposes and punished with administrative and criminal penalties of up to five years in prison.

The persons who hold administrative or management positions in obligated subjects, whether sole proprietorships or members, will be responsible for infractions attributable to the legal persons where they exercise their functions, in addition to the responsibility that corresponds to the obligated subject.

The penalties established are a fine of DOP2-4 million for very serious infractions, DOP1-2 million for serious infractions and DOP300,000 to DOP1 million for minor offences.

The law provides that in cases of sanctions for the commission of very serious or repeated offences, when the sanctioned entity is a legal person subject to administrative authorisation or licencing, the regulator may order its suspension or revocation. Without prejudice to the sanctions imposed on the obligated subject, one or more sanctions, from DOP500,000 to DOP3 million, will be imposed on those who, in an administrative or management position, are responsible for the very serious administrative infraction.

In the Dominican Republic there are no statutory defences for white-collar offences. The constitutional principle 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. 

The existence or implementation of a compliance programme within an entity is not by itself considered an extenuating circumstance. In some offences, such as money laundering, a compliance programme is mandatory for certain sectors.

There are no exempted industries and/or sectors nor de minimis exceptions for white collar offences under Dominican law. For that reason, even less serious cases can be prosecuted. In these cases, the prosecutor may consider the level of harm caused, or intended to be caused, in order to determine the applicable sanction. The same exercise will be made by judges since one of the criteria to determine the applicable sanction is the level of participation of the perpetrator. 

Since for white-collar offences there are no extenuating circumstances, small-scale crimes can and should, in principle, be prosecuted. However, the diminutiveness of the injuries can serve to mitigate the penalty and even lead to the granting of alternative solutions such as criteria of opportunity or the suspension to the same.

Self-disclosure is not listed as a mitigating factor. But in certain cases of organised crime or in certain complex cases, an opportunity criterion may be granted for co-operation. Some infractions of the Penal Code (none of an economic nature) allow the attenuation and even exemption of the penalty in cases of self-disclosure.

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.

The burden of proof in criminal proceedings rests with the prosecution.

The prosecution is in charge of demonstrating the accusations against the accused without the latter having to prove his or her innocence. The Dominican Constitution protects the presumption of innocence as a fundamental right in criminal proceedings. The prosecutor must carry out its investigative work considering the evidence pro-charge and pro-discharge, acting objectively and impartially in the stage prior to the indictment.

The Dominican Criminal Procedure Code establishes rules and guidelines to determine the sanctions to be imposed on all crimes, including white-collar crimes. In this case, the degree of participation of the accused and their conduct after the fact, their personal characteristics (education, economic and family situation, job opportunities, etc.), cultural patterns, the social and cultural context, the future effect of the sentence and the accused's capacity for reintegration, the state of the prisons and the seriousness of the harm to the victim.

The criteria expressly provided in the Criminal Procedure Code are:

  • the degree of participation of the accused in the realisation of the offence, their motives and their conduct after the fact;
  • the personal characteristics of the accused, 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.

There is the possibility of granting judicial forgiveness in cases of extraordinary circumstances in which the court can exempt the accused from penalty or reduce it below the legal minimum, provided that the penalty does not exceed ten years in prison, based on the following reasons:

  • the minimum participation of the accused during the commission of the infraction;
  • the provocation of the incident by the victim or other persons;
  • the occurrence of the infraction in unusual circumstances;
  • the participation of the accused in the commission of the offence under duress, without being an absolute legal excuse;
  • the degree of social significance of the damage caused;
  • the error of the accused in relation to the object of the infraction or due to his or her belief that the action was legal or permitted;
  • the action of the accused motivated by the desire to provide for his or her basic needs of those of their family;
  • the suffering of serious physical or psychological damage by the accused on the occasion of the commission of the infraction; and
  • the degree of social acceptance of the act committed.

Commonly in a criminal trial, the decision is pronounced and the corresponding penalties are immediately indicated. Likewise, at the same moment it is established if penalties imposed will be conditionally suspended, or if a judicial pardon will be applied, and the corresponding obligations, if any, applicable to this regime.

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

Medina Garrigó Abogados

Gustavo Mejía Ricart No.102,
corner of Abraham Lincoln
Edif. Corporativo 20/10, S 904, Piantini
Santo Domingo
Dominican Republic

+809 683 4422

ldiaz@mga.com.do www.mga.com.do
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Law and Practice

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Medina Garrigó Abogados is known for its track record in high-profile and complex cases. Its white-collar practice is led by partners with wide experience in regulated-markets investigations and criminal defence. The team comprises two partners and two associates representing clients in criminal investigation and defence as well as administrative procedures initiated by regulatory bodies. Partners have a specific expertise in bank fraud, money laundering, shareholder litigation and corporate fraud. Other areas of expertise shared by the rest of the MGA team are tax-fraud litigation, cybercrime and computer fraud. All members of the department are also active in academia. Both partners have been involved in the implementation of the accusatorial system of the Dominican Republic and have actively participated in reforms to criminal justice legislation. Recently, MGA's white-collar department successfully participated in the defence of the former Minister of Industry and Commerce, who was prosecuted among other individuals in the well-known Odebrecht Case.

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