Dominican Republic


Author: Lucas A. GUZMÁN LÓPEZ
Contact: l.guzman@gma.com.do (LinkedInProfile)

Overview of legal measures taken as of july 7, 2020 as response to the coronavirus. Please note: Due to the extraordinary situation, the legislation is in continuous evolution and may change very fast.

Introduction

CRISIS MANAGEMENT IN THE DOMINICAN REPUBLIC, GOVERNMENT MEASURES AND LEGAL PERSPECTIVE ON COVID-19[1]

In recent years the Dominican Republic has enjoyed an accelerated pace of economy growth. In fact, according to the World Bank, it was the fastest growing country in Latin America and the Caribbean in the last five years. However, it is estimated it will have zero growth on 2020, and the World Bank predicts the region will experiment a 4.6% drop in the economy due to COVID-19.

Prior to the first COVID-19 case in the country, the government initiated a plan to protect the people and the economy. On February 26, 2020, the President ordered the emergency acquisition of indispensable goods and services, these measures were all inclined for preparing for the eventual arrival of the virus. Later on, by March 12, 2020, a High Commission of experts was appointed by the President to develop a protection protocol in light of the imminent arrival of coronavirus, as well as strict sanitary measures on sea ports, airports, and the border with Haiti, consisting mainly on the physical analysis of each individual that entered the country. March 14, 2020, just before the emergency state was declared, all flights coming from Europe, China, Korea, and Iran were suspended and all passengers coming from any of these destinations were subject to mandatory quarantine period.

Because of the first cases of the disease, National Congress declared the country in state of emergency by virtue of Presidential request, and on March 19, 2020 the President issued a decree to enforce the state of emergency, which it is intended to last, after a few extensions, until June 13, 2020. The Executive Branch has enacted all pertaining protocols and halted commercial activities, with the exception of those concerning basic needs, such as health centres, supermarkets, banks, gas stations, and pharmacies. This decision had the sole purpose of flattening the infection curve.

The emergency state portrays prerogatives to the Executive Authority with the intention of lessening the infection curve and making sure the country will recover as swiftly as possible from this crisis. This legal-political measure is contained on the Constitution and may be imposed when facing situations that disturb or threaten the economic, social or environmental order of the country in a severe manner or when this occurrence is considered of public calamity. The checks and balances system in government structure provides that the President must be authorized by Congress before decreeing a state of emergency, as it has been done so far. Besides this constitutional genesis, Law 21-18 sets forth very specific regulations for states of emergency, providing that during this period any measures considered necessary towards fighting infectious diseases or protecting the environment may be undertaken as long as the peoples’ access to products and services considered of “basic need” is assured. Within the prerogatives allowed to the Executive Authority is the possibility to restrain the freedom of transit and association to assure the execution of the social distancing mandates developed by international institutions. This means that all military forces have been granted powers to arrest individuals who rupture the new mandatory rules, resulting in an overwhelming amount of citizens that have been imprisoned since the beginning of the quarantine period, which shall be analysed from the perspective of the heavy burden it represents to the judicial system that may receive a formal prosecution for every detainee within the 48 hours of detainment. An important question arises regarding the possibility to sanction people breaking the social distancing rules due to the absence of a legal disposition that sanctions behaviours of that kind. Nevertheless, the purpose of the measure is to serve as a deterrent for social conglomeration, which has proven effective within certain circles, but still has a long way to go.

Government has implemented a variety of decisions to mitigate the impact of the crisis. Undoubtedly, COVID-19 will put to test the resilience of the economy and the preparedness and response of the healthcare system. With this in mind, the question remains: has the economic distress in the post-pandemic world been surpassed and evolved towards to legally shielding economies and companies for the difficult times that lay ahead?


[1] Given the highly volatile nature of measure production in the Dominican Republic, all the initiatives described herein are updated up to June 1, 2020. Any other decision issued after this period will not be considered for the scope of this document.

1. INTERVENTIONS AND RESTRICTIONS

1.1 Legal basis

Constitutional habilitation to declare the State of Emergency

The juridical-political measure of declaring the State of Emergency is contained on article 265 of Dominican constitution and may be imposed when facing situations that perturb or threaten in a severe manner the economic, social or environmental order of the country or when this occurrence is considered of public calamity. As a result of the Checks and Balances that permeates the government´s structure, the President must obtain authorization from Congress before decreeing it as he has done so far. Besides this constitutional genesis, Law 21-18 sets some specifics on what the hermeneutics are in a state of emergency situation, declaring that during this period any measures considered necessary towards fighting infectious diseases or protecting the environment can be taken as long as the people´s access to basic needs is assured.



1.2 Boder

On may 12, 2020, seven days before the declaration of the State of Emergency, severe control measures were issued concerning the free transit of people in ports, airports and the border with Haiti. Two days later, the Executive Branch issued a complete stay of flights coming from Europe, China, Korea and Iran, as well as all flights departing from the Dominican Repúblic as of march 16, 2020.

This suspension remained until july 1st, 2020, when government issued the authorization for seaports and airports to open irrestrictly for commercial flights all around the country.


1.3 Visas

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1.4 Export control

General Measures

As a general measure, importation and exportation were temporarily suspended with the exception of fuels with the intention of guaranteeing the access of this good to the population. There remains a prioritization of the importation of food, medicine and necessary raw materials that constitute the component of the basic need kits that the population needs with a significantly high standard of health precautions in the weak spots of the importation process.

The declaration of the State of Emergency brought as a result the slowdown of the exportation growth the Dominican Republic had been experiencing in the last few years, in this regard, there was a 33.7% decline in exportation in April as compared to the previous month, going from USD 818.60 million to USD 542.08 millions. Between February and March, foreseeing the appearance of the COVID – 19 in Dominican soil, there was a contraction of 8.9% constituting a decrease of USD 80.24 million.

1.5 Prohibition of crowds

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1.6 Lockdown

General Measures

As part of the social distancing rules, the Executive Branch established by means of Decree 135-20 on March 20, 2020, a curfew from 8:00 P.M. to 6:00 A.M. with the exception of health-related activities, private security company workers and accredited press members. Anyone found on the streets outside of this lapse was subject to detainment and imprisonment. As short as six days later, on March 26, Decree 138-20 extended the curfew hours from 5:00 P.M. to 6:00 A.M. On May 17, 2020, the Decree 161-20, the Executive Branch extended the curfew between Monday and Saturday from 7:00 P.M. to 5:00 A.M and Sundays from 5:00 P.M. to 5:00 A.M. By the means of Decree 214-20 of June 12, 2020, the curfew was extended from 8:00 P.M. to 5:00 A.M. Finally, on July 1, 2020, the curfew was officially raised.

From March 30, 2020, there was an increase in police and armed forces presence in the streets during the curfew with the intention of making sure it was being respected as well as enforcing the social distancing measures, decision that remained for the remaining of the curfew period.

1.7 Open Businesses, Industries and allowed Gatherings

General Measures

On March 17, 2020, the Executive Branch ordered the suspension of all commercial activity with the exception of those providing for the basic needs of the population: health centers, supermarkets, banks, gas stations, pharmacies, etc. All popular markets were suspended as well as the binational markets located in the border with Haiti. All food dispensing business were ordered to remain closed and offer their services through pick-up and delivery, respecting the social distancing and security measures enacted by the government. Three days later on March 20, 2020, the High Commisioner for the Control and Prevention of the COVID – 19 prohibited the free transit of all public transportation, including buses, minibuses, taxis, subway and cableway. This general prohibition was then modified by means of Decree 135-20 of March 23, 2020 which allowed the free circulation of people and vehicles destined to industries related to food, energy, water, electricity, telecommunications, ports, airports and other basic services. Finally, on July 1, 2020, the process to lift the commercial suspension began gradually.

1.9 Supply of essential medical goods

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1.10 Health care

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On February 26, 2020, by means of Decree 87-20, the Executive Branch declared the emergency purchase of goods and services indispensable for the preparation, prevention and response to the eventual entry of the COVID – 19 to the Dominican Republic. On March 12, 2020, the High Commisioner for the Control and Prevention of the COVID – 19 was created with the mission of creating the protocols for population protection and infection prevention.

On March 24, 2020, there was an exponential increase in the capacity of the government to implement generalized COVID – 19 testing through three strategies:

1. The tests can be done in the National Laboratory and two private laboratories while de Public Health Secretary habilitates new facilities in public hospitals;

2. Private health institutions will be capacitated to perform the tests in accordance with the protocols created the National Laboratory; and,

3. A “quick test” will be announced whose price will be completely covered by the administration for a more encompassing testing, assuring that every day more people will have access to it.

On March 25, 2020, the dominican administration announced that it will cover the cost of the “quick tests” in authorized laboratories for those persons with a medical prescription, two or more symptoms, over 59 years of age or if he or she suffers from a medical condition that is considered of high risk. On April 6, 2020, an agreement was reached with the insurance administrators with the goal of assuring that patients will be taken care of in private health centers without the need of extra payments given that the testing could be covered by them.

1.13 General measures


1.12 Sanctions

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2. MEASURES TAKEN BY THE GOVERNMENT

2.1 Legal basis

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2.2 Support measures

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3. LABOUR REGULATION

3.2 Support measures

Measures pertaining the labour market

The Secretary of Labour issued resolution 007/2020 acknowledging the risk of COVID-19 spread in the workspace, especially for those businesses that were not suspended from operating on site. It urged employers to adjust and make working hours more flexible, as well as implementing remote work when possible. In companies that had to suspend their activities, it suggested granting paid vacations to employees. However, this was a controversial measure, given the financial impact, due to its recommendatory nature it was not implemented in most commercial entities.

As a democratic and social nation, government has implemented a variety of measures with two goals in mind: a) alleviate the economic distress on businesses and its owners, given the impossibility to produce cash flow; and, b) assure that employees are able to receive a fixed money income.

Due to the commercial halt ordered by the Government, this situation has caused for some business owners to suspend employment contracts for as long as the crisis and/or the halt on all commercial activities are in place. There are several possible legal solutions that could be applied, especially because an employment contract can be suspended by mutual consent, force majeure, contagious disease of the employee or the absence of funds for business continuity, all of which may fit considering the current events, and depending on the rationale for suspension, may demand the authorization from the Secretary of Labour.

However, it is not recommended to terminate the employment contract through the dismissal of the employee whilst the suspension option is available. Suspending the enforcement of the employment contract entails no liability to either party; the employer will be released of its obligation to pay wages and the employee will not be obliged to perform its job until the labour contract is resumed, either because suspension it has reached its term or parties reach an agreement.

The main and most significant measure enacted by the Government was the launch of the “Employee Solidary Aid Fund” social program (FASE, under its Spanish acronym). This program assures that employees receive up to 70% of their monthly salary (with a cap of DOP 8,500 – approximately USD 158). The employer is not obliged to cover the remaining 30%. The lone prerequisites to access this program is that the employer be up to date in its social security’s duties and its operations be temporarily ceased. At the beginning of April, up to 28% of all formal employees had been suspended (approximately 655,000), many of whom were benefiaries of this initiative.

3.1 Legal basis

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8. COMPANIES

Measures

Restructuring and Liquidation of Commercial Entities

Although the effects are yet to be seen, the economic context created by COVID19 will likely turn into a niche for the development and steady growth of a relatively new and unexperienced judicial matter: the restructuring and liquidation of commercial entities under Law No.141-15. The scope of this process focuses into two very important aspects: a) to protect commercial entities from declaring economic insolvency (popularly known as bankruptcy) by keeping the business going with a series of measurements given by the law; and, b) to protect the creditors from an insolvent debtor who cannot commit to the due payment. Still a mostly unused practice in the country, many businesses will need its beneficial effects to continue operations when facing payment cessation or low/inexistent cash flow to defray their debts.

FINAL REMARKS

COVID-19 will change -as it has so far- everything we knew as normal and will affect every aspect of our daily routines with profound implications on the economic, financial and social areas. It is clear, then, that this crisis might become the single most important occurrence towards the final and necessary automation of services.

If something positive has resulted due to the pandemic in Dominican Republic, it would be fact that this crisis caused Government agencies to provide services in a more efficient manner, investing in technology that allows for the general public to access these services online in a timely fashion. The most revolutionary change, due to the broad services and number of users, is the initiative of Council of the Judicial Authority of applying information and communication technologies in courts and administrative processes to ensure a more efficient investment of funds and human resources, as well as services rendered. The state of necessity created by this pandemic regarding the continuance of the judicial services has been unmasked as the needed push to show policy makers that it is time to rely on the innovative tools technology available to enhance this important public service.

Businesses in general have also reinvented themselves to align their practices with current times: supermarkets are providing online shopping and delivery to minimize contact and crowds, catering services and restaurants are working on take-out but mostly via delivery, schools and universities have established virtual classes, consultants and offices in general were required to close to the public and work remotely, and many more. Hence, legislation must also adapt to regulate our new normal: e-commerce, flexible/remote work and privacy implications, to name a few.

Maintaining social distancing and best practices to mitigate the spread of COVID19 will be a determining factor in flattening the curve. It seems that although testing for the virus started early in the process, the availability of such tests does not meet the demands of the population that requires or requests to be tested. The health system has been able to provide assistance to those who have reported symptoms and tested positive, but if measures are not kept in place, a somewhat fragile public health system is likely to collapse.

As we continue to navigate this crisis, resulting economic outlook will depend on how the aforementioned measures are implemented and how resilient both the government and the people can be. A complete assessment must be made regarding the long-lasting impact this matter will have in our daily routines and careful planning is key for business continuity when facing revenue decline and economic activity reduct

All the measures implemented in the country were launched under the projection made by the World Bank stating that after the period of sustained growth that the country experimented in this last few years, this crisis is expected to trigger a slowdown and disrupt fiscal consolidation. It is yet to be seen if Dominican economy can go through an important recession like the one in 2008, where resilience was a key factor. This crisis has transcended borders. National leaders and private economic agents must acknowledge their roles and only within the mutual cooperation of this players the economic world as we knew it will reappear sooner than later.