Transparency of the Regulatory System
The government 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 IDA provide oversight of the transparency of the system as it relates to investment.
Rule-making and regulatory authority lies with the unicameral parliament. The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one Speaker, and one clerk.
Relevant ministries develop laws which are drafted by the Ministry of Justice, Immigration and National Security. FDI is governed principally through the laws that oversee the IDA and the citizenship by investment (CBI) program. Laws are available online at http://www.dominica.gov.dm/laws-of-dominica .
Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws. In some instances, the government convenes a special committee is convened to make recommendations on provisions outlined in the law. The government uses public awareness campaigns to sensitize the general population on legislative reforms. Copies of proposed regulations are published in the official gazette just before the bills are taken to parliament. 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 guards 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.
Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits its members to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the 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 ECCU, although there are some minor differences in implementation from country to country.
The enforcement mechanisms of these regulations include penalties or legal sanctions. The IDA 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 OECS and the ECCU, 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 OECS authority, unless specific concessions are sought.
The Dominica Bureau of Standards develops, establishes, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, food and food products, and the facilitation of trade. It also conducts national training and consultations in international standards practices. As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016. Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade. The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain. Dominica has already implemented a number of TFA requirements. A full list is available at: https://www.tfadatabase.org/members/dominica/measure-breakdown .
The Advanced Cargo Information System is a CARICOM project that seeks to improve the capability to track cargo efficiently. Dominica is one of three regional pilot countries that have already enacted the enabling legislation. Dominica has fully implemented the Automated System for Customs Data.
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. Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal. 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 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.
IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country. The Cabinet of Dominica makes the final decision on investment proposals.
The IDA provides “one-stop shop” facilitation services to investors to guide them through various stages of the investment process. The IDA 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 Citizenship By Investment program, qualified foreign investors may obtain citizenship without voting rights. Applicants can contribute a minimum of USD USD 100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least USD 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 is available 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM. Dominica does not have domestic legislation to regulate competition. 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 Justice, Immigration and Security 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 must be acquired in the public interest. There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings. 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 for 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.
The country ranks 83rd out of 190 countries in resolving contract disputes in the 2019 World Bank Doing Business Report. Dispute resolution in Dominica takes an average of 681 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolution of commercial disputes. 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. Local courts recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides mediation.
Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. The 2019 Doing Business Report ranks Dominica 134 out of 190 countries in resolving insolvency.