In Trinidad and Tobago, discussing business in the Dominican Republic is incomplete without mentioning the feared Law 173 Distributor Law. There have been some exporters who this law has burned in the past, and those stories remain well-circulated among businesspeople. exporTT representatives were fortunate to attend the Doing Business in the Dominican Republic seminar on May 2nd, a crucial element of the TTMA-led Export Booster Initiative funded Trade Mission to the Dominican Republic.
Ms. Taiana Mora shared a bit about what Law 173 was about and how it can be a serious issue for exporters registering their brands in the market.
At this seminar, we heard directly from the Central Bank of the Dominican Republic, responsible for registering distributor contracts. It was noted that once the contract is registered with the Central Bank, it exists for life, and the distributor can make claims on the brand. Most importantly, we learnt that the CARICOM-Dominican Republic Free Trade Agreement includes a provision allowing countries within CARICOM to opt out of Law-173. The relevant paragraph in the clause is included below:
Once the parties (exporter and distributor) have agreed to remove the law from their contract then it is not possible for the document to be registered with the Central Bank and the distributor cannot make any claims on the brand.
In response to a question posed by the newly elected TTMA President, Mr. Roger Roach, the DR Central Bank advised that contracts signed prior to the CARICOM-DR trade agreement will still hold as those have already been registered. Once the contract is registered there is no going back.
This was an extremely important discussion and has brought clarity to this important issue. Exporters can now go confidently into their negotiations and eventual contracts with distributors knowing how this law should be treated to protect their brands and retain ownership. Ms Mora reiterated that brands should be registered in the name of the owner and outlined the process for doing so.
Look forward to further clarification from Ms Taiana Mora who promises to share the exact wording that can be used in your contract to ensure that the law does not hold and cannot be registered.
