Transparency of the Regulatory System
The Commonwealth of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. The Ministry of Finance and the Invest Dominica Authority provide oversight of the transparency of the system as it relates to investment.
Rule-making and regulatory authority lies with the Unicameral Parliament of the Government of Dominica. The Parliament has one chamber which consists of 21 members elected for a five-year term in single-seat constituencies, nine appointed members and one Speaker and one Clerk of Parliament.
All regulations that relate to foreign investment into Dominica are governed by the relevant national laws of Dominica. These laws are developed within the respective ministries and drafted by the Ministry of Justice, Immigration and National Security. These laws are enforced by the relevant ministry or ministries. The attraction of foreign direct investment is governed principally through the laws that oversee the Invest Dominica Authority and the Citizenship by Investment Program. The National Laws are available online at http://www.dominica.gov.dm/laws-of-dominica . This website contains the full text of laws currently in force.
Although some draft bills are not subject to public consultation, input from various stakeholder groups is enlisted in the formulation of the law. In some instances, a special committee is convened to make recommendations on provisions outlined in the law. Public awareness campaigns via print and electronic media are used to sensitize the general population. Copies of proposed regulations are published in the Official Gazette just before the bills are taken to the House of Assembly. Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice. The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases. The government budget and an audit of that budget are available on the website: http://www.opm.gov.dm .
Accounting, legal and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards which stem from the General Accepted Accounting Principles govern the accounting profession in Dominica.
The Office of the Parliamentary Commissioner or Ombudsman is a constitutional provision to guard against excesses by government officers in the performance of their duties. The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body.
Regulations are developed nationally and regionally. At the national level, the relevant ministry reviews and recommends the legal authority that would enable it to effectively perform at the desired levels to reach optimum development objectives. These reviews are then submitted to the Ministry of Justice, Immigration and National Security for the preparation of corresponding draft legislation. Subsequently, the Ministry of Justice, Immigration and National Security reviews all agreements and legal commitments (national, regional and international) to be undertaken by Dominica, to ensure consistency prior to finalization. The Invest Dominica Authority has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.
Dominica’s membership in regional organizations, particularly the Organization of Eastern Caribbean States and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the new Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the Eastern Caribbean Currency Union, although there are some minor differences in implementation from country to country.
The enforcement mechanisms of these regulations include penalties or legal sanctions. The Invest Dominica Authority can revoke an issued Investment Certificate if the holder fails to comply with certain stipulations detailed in the Act and its regulations.
International Regulatory Considerations
As a member of the Organization of Eastern Caribbean States and the Eastern Caribbean Economic Union, the Commonwealth of Dominica subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies, aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Dominica is obligated to implement regionally developed regulations, such as legislation passed under Organization of Eastern Caribbean States Authority, unless specific concessions are sought.
The Dominica Bureau of Standards is a statutory body established under the Standards Act of 1999. It develops, establishes, maintains and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers as well as protecting the environment, food and food products, the quality of life for the citizenry and the facilitation of trade. It also conducts national training and consultations in international standards practices. As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, the Commonwealth of Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
Legal System and Judicial Independence
Dominica bases its legal system on British common law. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country. The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution. Appeals are made in the first instance to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all Organization of Eastern Caribbean States members.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.
The United States and Dominica are both parties to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.
Laws and Regulations on Foreign Direct Investment
The Invest Dominica Authority’s foreign direct investment policy is to actively pursue foreign direct investment into priority sectors, and advise the government on the formation and implementation of policies and programs to attract sustainable investment into Dominica. The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act. Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Stamp Act, the Aliens Landholding Regulation Act and the Residential Levy Act.
All proposals for investment concessions and incentives are reviewed by the Investment Dominica Authority to ensure the project is consistent with the national interest and provides economic benefits to the country. All proposals are submitted to the Cabinet of Dominica for final consideration.
The Invest Dominica Authority provides ‘one-stop shop’ facilitation services to investors to guide them through various stages of the investment process. The Invest Dominica Authority offers a website that is useful for navigating the laws, rules, procedures and registration requirements for foreign investors: http://www.investdominica.com .
Under Dominica’s Economic Citizenship Program, foreign individuals may obtain citizenship in accordance with section VII of the Constitution and the 1993 Amendment to the Citizenship Act, which grants citizenship (without voting rights) to qualified investors. Applicants can contribute a minimum of USD 100,000 to the Economic Diversification Fund for a single person or an investment in designated real estate with a value of at least USD 200,000. Applicants must also provide a full medical certificate, undergo a background check and provide evidence of the source of funds before proceeding to the final stage of an interview. The government introduced a Citizen by Investment Certificate in order to minimize the risk of unlawful duplication. Further information can be obtained from the Citizenship by Investment Unit of Dominica website at: http://cbiu.gov.dm .
Competition and Anti-Trust Laws
Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM States. Member States are required to establish and maintain a national competition authority for implementing the rules of competition. CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct. CARICOM competition policy addresses anti-competitive business conduct, such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction or distortion of competition within the Community, and actions by which an enterprise abuses its dominant position within the Community. No legislation is yet in operation to regulate competition in Dominica. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill is with the Ministry of Legal Affairs for review.
Expropriation and Compensation
There are no known pending expropriation cases involving American citizens. In such an event, Dominica would employ a system of eminent domain to pay compensation when property needs to be acquired in the public interest. There were no reported tendencies of the government to discriminate against U.S. investments, companies or landholdings in the reporting period. There are no laws mandating local ownership in specified sectors.
ICSID Convention and New York Convention
Dominica is not a party to the Convention on the Settlement of Investment Disputes. However, it is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Arbitration Convention. The Arbitration Act of 1988 is the main legislation that governs arbitration in Dominica. It adheres to the New York Arbitration Convention.
Investor-State Dispute Settlement
Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. Dominica does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in Dominica.
Dispute resolution in Dominica generally took an average of 681 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolutions to commercial disputes. Dominica is ranked 79th out of 190 countries in resolving contracts in the World Bank’s 2018 Doing Business Report. Through the Arbitration Act of 1988, the local courts recognize and enforce foreign arbitral awards issued against the government. Dominica does not have a recent history of investment disputes involving a U.S. person or other foreign investors.
International Commercial Arbitration and Foreign Courts
The Eastern Caribbean Supreme Court is the domestic arbitration body and the local courts do recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.
Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. The 2018 Doing Business Report addresses the strength of the framework and its limitations in resolving insolvency in Dominica and ranked Dominica 132nd of 190 countries in this area.