Dominican Republic. Regulatory bodies. 3 Which regulatory bodies are responsible for the regulation of. Jurisdiction

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1 DOMINICAN REPUBLIC Dominican Republic Jaime R Angeles General 1 How can the government s attitude and approach to internet issues best be described? The Dominican government has been always interested in developing projects to encourage democratisation of the use, access and application of information and communications technologies for Dominican society. With various initiatives, the government has focused on building a national strategic vision to support the development of policies to implement the extensive and efficient use of technology in the Dominican A special taskforce has been organised with public institutions and the private sector for the elaboration, development and evaluation of the IT strategy of the Dominican Tax and customs authorities perform and offer their services through online systems. Legislation 2 What legislation governs business on the internet? The Dominican Constitution encourages and protects the use of technology. Intellectual property laws (copyright and industrial property) and consumer protection regulations are up to date for new technologies and the internet. In the Dominican Republic there is also the E-Commerce and Digital Signature Law. It is based on the United Nations Committee on International Trade Law (UNCITRAL) bill, with important definitions of digital signatures and data messages. It also contains the principle that the validity of information will not be denied for the sole reason that is contained in a data message. For the implementation of the E-Commerce Law, several complementary regulations have been enacted on: internet official time; digital signatures for electronic transfer of funds and financial transactions; digital signatures for electronic conveyancing and registration of land property (deed registry); and certification authorities, data protection and private information in those regulated entities. There is also a modern computer crime law (the High Technology Crimes Law), based on the Convention on Cybercrime (Budapest 2001), even though the Dominican Republic is not still part of this convention. On business-to-consumer transactions, consumer protection law in the Dominican Republic expressly addresses sales and services on the internet. The Free Trade Agreement between the United States and Central American countries (DR-CAFTA) and its implementing regulations have rules that affect internet and e-commerce matters in the Dominican Regulatory bodies 3 Which regulatory bodies are responsible for the regulation of e-commerce and internet access tariffs and charges? There are no regulatory bodies directly responsible for the control of e-commerce, but there are some agencies in charge of supervising specific fields related to business over the internet. The Government Telecommunications Agency (INDOTEL) controls the telecommunications companies that offer internet access and also regulates the certification authorities of digital signatures. INDOTEL has enacted several rules for the use of digital signatures and the implementation in general of the E-Commerce Law. The consumer protection agency checks the compliance of protective provisions on business-to-consumer electronic agreements. The special investigation agency for computer crime, DICAT, has the authority to investigate illicit conduct in violation of the High Technology Crimes Law. ISPs may freely set the tariffs and charges for their services; there is significant competition in the telecoms business in the Dominican All telecoms services are taxed at 28 per cent, including value-added tax. Jurisdiction 4 What tests or rules are applied by the courts to determine the jurisdiction for internet-related transactions (or disputes) in cases where the defendant is resident or provides goods or services from outside the jurisdiction? Dominican courts have jurisdiction over internet-related issues, as with other regular matters. As a general rule, Dominican courts will have jurisdiction over a judicial action when the defendant is domiciled in the Dominican The obligations have to be fulfilled in the Dominican There are procedures to notify a foreign company or defendant with its legal address outside the country. There are specific areas where Dominican courts or special government agencies would be competent to resolve a conflict: consumer protection matters; telecommunications services to be rendered in the Dominican Republic; antitrust issues with effects in the Dominican Republic; and illegal conduct that constitutes a high-technology crime when it has effects in the Dominican Republic, or has been committed by the use of any means in Dominican territory. Dominican courts are under an obligation to review and take into consideration all kinds of documentation, including that in digital format. 60 Getting the Deal Through e-commerce 2012

2 DOMINICAN REPUBLIC Contracting on the internet 5 Is it possible to form and conclude contracts electronically? If so, how are contracts formed on the internet? Explain whether click wrap contracts are enforceable, and if so, what requirements need to be met? Yes, contracts can be formed and concluded electronically in the Dominican Contracts can be formed using electronic documents. It is fair to say that the E-Commerce Law gives confidence to the digital signature (not the simple electronic one). It also serves as a legal basis for tax and customs and other government authorities to offer many of their services online. Click wrap contracts are enforceable in the Dominican Republic and specifically software copyright licences. 6 Are there any particular laws that govern contracting on the internet? Do these distinguish between business-to-consumer and business-tobusiness contracts? The E-Commerce and Digital Signatures Law gives validity to all digital transactions in the Dominican Republic, mainly business to business and government to business and citizens. It provides that contracts entered as data messages shall be equally valid and effective as those executed on paper. Business-to-consumer transactions are regulated by the Consumer Protection Law. It implies certain obligations as to providing customer information, delivery guarantees, warranties, cooling-off period for exchange and refund, and all the consumer protection regulations. 7 How does the law recognise or define digital or e-signatures? The complementary presidential rule that enforces the E-Commerce and Digital Signatures Law establishes that the formation of contracts over digital media requires the full identification of the persons who perform the transactions and the verification of the integrity of the contents of electronic documents, in order to guarantee the eventual value of proof, judicially and extrajudicially, of digital signatures and data messages. That is evidence of the importance of digital and electronic signatures. But e-commerce regulations in the Dominican Republic differentiate between the concepts of digital and electronic signature: a digital signature (the only type of signature covered in the E-Commerce Law) shall be understood as a numerical value adhering to a data message and which, using a known mathematical procedure, linked to a password of the initiator and to the text of the message, permits one to determine that this value has been obtained exclusively with the password/key of the initiator and the text of the message, and that the initial message has not been modified after the transmission was made; an electronic signature (only established in the presidential rule and not in the E-Commerce Law) is understood to be the body of electronic data integrated, linked, or associated in a logical manner with other electronic data, which by agreement between the parties, is used as a means of identification between the sender and the addressee of a data message or a digital document and which lacks some of the legal requirements to be considered a digital signature. The presidential rule expressly states that an electronic signature does not have the same validity as a digital signature. The Telecommunications Authority (INDOTEL) has enacted several specific and technical rules for the use of public key digital signatures in commerce. Also there are specific rules for the use of digital signatures for electronic payment systems in the Dominican Republic, and also rules that incorporate the real estate regime (deed registry and land registration courts) to the public key infrastructure, supplying digital identities to the officials and the use of documents digitally signed by and to this regime. 8 Are there any data retention or software legacy requirements in relation to the formation of electronic contracts? There are no data retention or software legacy requirements in relation to the formation of electronic contracts in the Dominican However, the possibility to digitally retain documents and data is legally recognised, for future use and legal evidence. Regulations for the implementation of the E-Commerce Law recognise that compliance with the legal requirement to retain documents, records or data, according to current legislation, it may be satisfied with the preservation of digital documents. In addition, the High Technology Crimes Law requires that telecommunications service providers shall keep the data of traffic, connection, access or any other information that may be useful to an investigation for a minimum period of 90 days. Security 9 What measures must be taken by companies or ISPs to guarantee the security of internet transactions? There are no specific regulations regarding the security of internet transactions applicable to companies or ISPs. Banking institutions do have legal obligations to ensure transactions are secure. 10 As regards encrypted communications, can any authorities require private keys to be made available? Are certification authorities permitted? Are they regulated and are there any laws as to their liability? The Dominican Constitution protects the right of privacy and it includes all kind of telecommunications. Only with a judicial order, does the district attorney, in an official investigation, have the authority to require a private key. Following the recommendations in the Cybercrime Treaty, the district attorney has the authority to facilitate (or order) access to an information system. During an investigation, with a judicial order the district attorney would require private keys to be made available. Under Dominican law, information system covers any and all technological means, media, software, etc. All the authorities have the obligation to maintain the information collected as confidential, until it reaches a public criminal case. Certification authorities In the Dominican Republic, the Law on E-Commerce, Documents, and Digital Signatures allows certifying entities to be companies, both public and private, of national or foreign origin, and chambers of commerce, which, after application, are authorised by the Dominican Telecommunications Authority (INDOTEL) and comply with the requirements established in the Dominican regulations. These entities are regulated by the E-Commerce Law and regulations from INDOTEL. They cover liability and expressly state that, except by agreement between the parties, the certifying entities shall be liable for the damages and harm which they cause to any person. In application of the DR-CAFTA rules, certifying entities of digital signatures that are domiciled in the United States are not required to establish domicile in the Dominican Republic as a condition of providing services. 61

3 DOMINICAN REPUBLIC Domain names 11 What procedures are in place to regulate the licensing of domain names? Is it possible to register a country-specific domain name without being a resident in the country? There is no residency obligation to register a domain name under cctld.do. Domain name registration under the cctld.do is administered by the Network Information Center, NIC DO. The domain name to be registered must fulfil the same technical characteristics as with most registrars. The domain names are assigned to an entity or person for a renewable period of time. If the domain registration expires, it remains available for any third party that requests it. NIC DO maintains a list of names that will not be able to be registered as domain names because they are related or because they refer to: the Internet Assigned Numbers Authority (IANA) s structure; ICANN s structure; or internet terms. There are certain terms reserved for NIC DO s operation, such as domain names that correspond or allude to names of cities and/or peoples of the Dominican Republic that can only be registrable at second level for the Dominican government, and also domain names under the cctld.do must not refer to official or military concepts without being authorised. As formal requirements, NIC DO requires information about the administrative, technical payment contact and also about the person or organisation that is requesting or entrusting the registration of the domain name. When an IP address of the DNS service is provided, this IP address has to send authoritative responses to any consultation that could be made. All filings to NIC DO should be made using its web page at There is no publication of submissions, and filings are processed on a first come, first served basis. For every formal application for domain name registration under the cctld.do NIC DO will the applicant s administrative contact requesting acceptance of an agreement of record; the application will be processed only after NIC DO receives the acceptance of the agreement of record; if the acceptance is not received within the following five calendar days, the application will be rejected. 12 Do domain names confer any additional rights (for instance in relation to trademarks or passing off) beyond the rights that naturally vest in the domain name? Under the NIC DO regulations, domain names do not confer any additional rights other than to manage the DNS delegation of the domain, using the interface supplied by NIC DO, renewal and cancellation rights of the domain name. It still has to be evaluated if the Dominican PTO office (ONAPI) or courts are going to regulate the use of domain names. In the Dominican Republic use for six months prior to a registration date might grants rights to defend or enforce a trademark. 13 Will ownership of a trademark assist in challenging a pirate registration of a similar domain name? Yes, provided that the activities or businesses of the trademark holder and the domain name owner are the same or alike, if there is likelihood of confusion to internet users, or if the domain name owner cannot show a good-faith or legitimate use of the domain name. Advertising 14 What rules govern advertising on the internet? There is a distinction between advertisers as content providers (all products and services) and advertising from telecommunications providers. Advertiser as content provider There are not specific rules for advertising on the internet; consumer protection rules and rules relating to specific market products (pharmaceuticals, tobacco, alcohol, etc) apply. Advertising by telecoms providers When companies that provide telecommunications services in the Dominican Republic undertake internet advertising, they have to comply with regulations that prohibit unfair competition practices. Regulations define certain behaviour, conduct or practices as presumed unfair practices, including those that have the purpose or effect of: diverting the clientele of any activity, commercial benefits or other establishments, provided that the conduct is contrary to good commercial practice or honest practice in industrial or commercial matters; creating confusion with a third-party activity, commercial benefits or business; or misleading the public about a third-party activity (false or omitted information, false or improper comparisons, imitation, etc). We have to mention that in the Dominican Republic the non-authorised use of a third-party trademark or any protected sign will be considered unfair competition, even used in translation or accompanied by expressions such as kind, type, style, imitation or the like. 15 Are there any products or services that may not be advertised or types of content that are not permitted on the internet? Products such as pharmaceuticals, tobacco and alcohol have to comply with specific rules. Illegal products such as drugs, pornographic material to children, etc are definitively banned. Telecommunications services are duly regulated against unfair competition. See question 14. Financial services 16 Is the advertising or selling of financial services products to consumers or to businesses via the internet regulated, and, if so, by whom and how? There are no special rules for the advertising of financial institutions on the internet. The advertising or offering of all and any financial services are restricted to legally authorised entities by the Central Bank of the Dominican As general rules are enforced, the Consumer Protection Law and unfair competition regulations also apply. Deceptive advertising of financial institutions to attract clients and unfair competition practices are also regulated by the Central Bank. Defamation 17 Are ISPs liable for content displayed on their sites? Defamation outside the digital world has criminal and civil liability for all entities, including TV and radio stations and newspapers as regards content within editorial control (news, interviews and editorial comments, for example). 62 Getting the Deal Through e-commerce 2012

4 DOMINICAN REPUBLIC Defamation on the internet is illicit in the Dominican Republic, but there are no laws expressly regulating ISPs liability for defamation made by a user of the ISP services. In accordance with the Civil Code, depending on the facts, an ISP might be held accountable for such content. Court decisions in the Dominican Republic on defamation on the internet have not yet addressed the issue of ISP liability. 18 Can an ISP shut down a web page containing defamatory material without court authorisation? As a contractual principle, the ISP terms in the user agreement will govern relations between an ISP and a user. If a shutdown provision is included in the agreement, the ISP might shut down a web page without court authorisation. Some Civil Code rules may prevent any unilateral removal, depending on the contract terms used in the agreement. Intellectual property 19 Can a website owner link to third-party websites without permission? Under intellectual property law (copyright and industrial property), there are no safe harbour provisions for IP infringement of any kind for ISPs. However, in the DR-CAFTA free trade agreement there are immunity provisions on IP for ISPs. The DR-CAFTA uses the language of the US Digital Millennium Copyright Act (DMCA). The DR-CAFTA limits liability only for certain activities known as safe harbours : transmitting, routing, or providing connections for material; automated caching; storage at the user s direction; and referring or linking. The liability granted limits relief to non-monetary measures and further limits relief to compel or restrain ISPs to engage in particular actions to reasonable restrictions. 20 Can a website owner use third-party content on its website without permission from the third-party content provider? Intellectual property regulations do not permit use of third-party content, without infringing copyright, trademark or other IP rights. 21 Can a website owner exploit the software used for a website by licensing the software to third parties? Copyright law in the Dominican Republic establishes very restrictive rights in favour of the software producer. If a user is not duly authorised for reproduction or distribution, it cannot legally license the software to a third party. 22 Are any liabilities incurred by links to third-party websites? See question 19. Data protection and privacy 23 How does the law in your jurisdiction define personal data? There is no data protection legislation in effect in the Dominican Republic, outside the constitutional parameters for protecting personal data. The only regulation that expressly defines personal data is an e-commerce regulation for certification entities, the service providers of electronic signature and the registry units, and service or infrastructure suppliers operationally linked to them to the extent of their contractual relationship ( regulated entities ). In this regulation, the definition of personal data is any information concerning identified or identifiable natural person. Data concerning legal persons shall not be considered personal information, without prejudice to those data relating to natural persons who are linked to these legal entities that will be considered as personal data, comprising, among others, the data of its representatives, agents or employees. 24 Does a website owner have to register with any controlling body to process personal data? May a website provider sell personal data about website users to third parties? Outside regulations for regulated entities in e-commerce (see question 23), there is no controlling body to register entities that process personal data. At this moment, as we do not have data protection legislation in force. In relation to the possibility of selling personal data, we have to take into consideration that the Dominican Constitution reduces that possibility when expressly protecting personal data and includes the provision that the treatment of data and personal information shall respect the principles of quality, lawfulness, loyalty, security and order. A person will always have the right to request the competent judicial authority to order the correction or destruction of information that unlawfully affects his rights. It is likely that a person will have the right to oppose the sale or transfer of website user data to third parties. 25 If a website owner is intending to profile its customer base to target advertising on its website, is this regulated in your jurisdiction? There is no regulation for target advertising in the Dominican However, the Dominican Constitution protects personal privacy and protects against the interference or meddling in private life and any kind of correspondence. 26 If an internet company s server is located outside the jurisdiction, are any legal problems created when transferring and processing personal data? Outside regulations for regulated entities in e-commerce (see question 23), there is no specific regulation that controls transferring and processing personal data. However, the same comments about the Dominican Constitution apply as in question 24. It mandates that the treatment of data and personal information shall respect the principles of quality, lawfulness, loyalty, security and order. 27 Does your jurisdiction have data breach notification laws? The Dominican Republic does not have data breach notification obligations in general, outside the above-mentioned regulated entities that do not have the obligation to notify, but have an obligation to secure the data. Financial institutions, as mentioned above, also have an obligation to perform their operations in a secure environment. Taxation 28 Is the sale of online products subject to taxation? In the Dominican Republic there are no customs duties, fees, or other charges for importing or exporting digital products by electronic transmission. Thus e-commerce retailers that provide their products over the internet, such as offering software downloads, should not encounter any customs duties for their product. But the products might be subject to value-added tax. 63

5 DOMINICAN REPUBLIC 29 What tax liabilities ensue from placing servers outside operators home jurisdictions? Does the placing of servers within a jurisdiction by a company incorporated outside the jurisdiction expose that company to local taxes? Income tax should be paid for gains made in the Dominican Republic by persons or companies irrespective of whether their legal address is in the Dominican The tax authorities do not have a unanimous position on the server location for determining the income tax of the company doing business on the internet. New tax regulations include internet gambling among the categories that have to pay tax. These companies will have to pay 10 per cent of monthly gross sales. The obligation is for the owner of the company and website to register with the Dominican tax authorities, and the law expressly indicates that it does not matter where the servers are located to comply with tax obligations. 30 When and where should companies register for VAT or other sales taxes? How are domestic internet sales taxed? The situation in the Dominican Republic is not what type of transaction is subject to sales tax ITBIS but the issue of collection, and the difficulty of enforcement in relation to the operations of a company that only does business over the web with the major target in the Dominican market (whether located in or outside the Dominican Republic). Technically the company that sold the goods or rendered the services subject to ITBIS should make a monthly declaration and payment of the amounts retained. Registration is mandatory with the Dominican authorities in order to render VAT obligations. We consider that the supervision of these operations is difficult for the Dominican Internal Revenue Office, due to the traditionally high tax evasion and the impossibility of registering all the companies doing business electronically in the Dominican Republic and located outside the island. 31 If an offshore company is used to supply goods over the internet, how will returns be treated for tax purposes? What transfer-pricing problems might arise from customers returning goods to an onshore retail outlet of an offshore company set up to supply the goods? Goods to be reimported to the Dominican Republic from repairs will be subject to a 10 per cent customs duty. Customers must prove they have duly paid the duty on first importing the merchandise. Gambling 32 Is it permissible to operate an online betting or gaming business from the jurisdiction? Online gambling is permitted in the Dominican Republic and will require permits from the Dominican authorities. There are no casinos online, but lottery, internet games and betting are fully operating in the Dominican Most of those businesses are connected to or extensions of bricks-and-mortar companies in the Dominican 33 Are residents permitted to use online casinos and betting websites? Is any regulatory consent or age, credit or other verification required? Residents are able to use all online gambling. All these activities are forbidden for minors under the legal age of 18 years. Outsourcing 34 What are the key legal and tax issues relevant in considering the provision of services on an outsourced basis? In outsourcing, contracts and labour regulations are key factors to be considered. There has to be an independent company (not related to the client to be outsourced) that is duly formed and managed. Failure to take this into account can result in liability under labour regulations for the outsourced company (client). A complete non-disclosure agreement is always highly recommended. Intellectual property provisions are important to take into account. Copyright rules in the Dominican Republic dictate that the outsourced client obtains duly signed assignments of copyright works. If an employee creates a work and it is not assigned to the employer, he or she might be entitled to own the copyright. Internationally recognised work for hire rules do not apply in the Dominican The payment of the outsourcing services will be subject to VAT at 16 per cent. All payments from a Dominican customer to a foreign supplier may be subject to 29 per cent income withholding tax. 35 What are the rights of employees who previously carried out services that have been outsourced? Is there any right to consultation or compensation, do the rules apply to all employees within the jurisdiction? All employees are regulated by the same laws in the Dominican There are no specific rights granted in such cases. Labour laws regulate the termination of an employee s contract (notice obligation) and in many cases severance has to be paid. If outsourcing practices result in the dismissal of an employee and this termination occurs without legal cause, the employee will usually be entitled to appropriate indemnification (other than notice and severance). Online publishing 36 When would a website provider be liable for mistakes in information that it provides online? Can it avoid liability? There is no safer harbour than offline, other than in copyright violations. Mistakes in information online would be considered as misinformation to consumers. The website provider has to issue a rectifying note on the same media (online) used for the publication of the information, with an explanation of the mistake or misinformation. If any consumer acquired goods or services due to the mistake that affected health or security, the advertiser would be obliged to refund. If the website provider is the advertiser, it is obliged to comply with consumer protection regulations. 37 If a website provider includes databases on its site, can it stop other people from using or reproducing data from those databases? Databases are protected in the Dominican Republic by copyright when there has been a creative selection of the data. In cases where there is a database as copyright work, there are legal measures to stop or impede illegal use. Referring to the data alone and not the database as a whole, the information is protected, obviously when it is confidential. If the data can be publicly accessed, there is little the company can do to prevent their use, unless they are not easily accessed and some sort of technological protection is included within or embedded with the data. It would be illegal to remove or circumvent the technological measure and to use the data accessed with the circumventing action. Legally, there would be judicial measures to prevent use of the data illegally accessed. 64 Getting the Deal Through e-commerce 2012

6 DOMINICAN REPUBLIC 38 Are there marketing and advertising regulations affecting website providers? Marketing and advertising regulations will definitely affect website providers as advertisers. Online marketing and advertising are expressly addressed in the Consumer Protection Law and also in trademark regulations. Update and trends The Dominican Republic is planning to take a major step with the Software Promotion Law bill. The new regulations will provide incentives to software development firms that set up inside the country and offer tax incentives reducing their taxes on revenue and facilitating the entry of more Dominican PyMEs (small and medium-sized businesses) to quality certification. Jaime R Angeles jangeles@angeleslugo.com Alberto Peguero 107 Tel: Miraflores Fax: Santo Domingo Dominican Republic 65