US auto imports no duty after Jan 2010, read important info on this!

[waytogo]

I know there are some people on this message board that regularly import cars. Lets see what they have to say about reality and if these illegal taxes can be successfully fought.

What I don't understand is why WE have to fight this. Why is the U.S. government sanctioning this obvious side stepping of their agreement ?

 

[PICHARDO]

What I don't understand is why WE have to fight this. Why is the U.S. government sanctioning this obvious side stepping of their agreement ?

For there to be a formal dispute from the US to the DR regarding this illegal charge (tax), they need a formal complaint by a US citizen affected by the DR's measures IN the DR. In this case like I explained in detail, a US citizen (read not a resident, permanent or not) must import a vehicle with all the required proof based on percentage of origin and other legal papers, including a written bill detailing the charge to that citizen from the DR's agency in charge of registering the vehicle here.

Once a formal complaint is made via the civil channels IN the US state from where the car was last registered/purchased by the importer (citizen), a concurrent formal case and investigation into the claims can be then made by the US side to the DR!

I know it sounds as it does! But it's how it works when dealing with international treaties and home laws vs international ones.
The citizen is the key here to get that ball rolling!

The DR has until Dec 31st to drop the charge (Tax) and review certain portions of the Itbis that are not compatible and illegal under the treaty it signed onto.

 

[PICHARDO]

The DR can claim their right (as described in the agreement) to place VAT in their domestic realm to goods imported equally to all equal goods imported from other countries to their defense. This is very much true and holds 100% in any disputed fact between the US and the DR, but for the same token the US can also place the same type of VAT in their domestic chain with tremendous impact to the DR side of that trade.

It's more of a question about who's more to benefit from the deal than not. Clearly for the DR to enter the US market directly is a priority it can't just toss aside in these economic times. The US can with ease do without the DR goods and won't feel a pinch over that and their interests for the region.

If what we have is morons in the administration of Fernandez today, which think they can pull the same veils they use to cover the eyes of lesser Dominicans (as they see them mostly) onto the eyes of the gringos, they better wake up and smell the coffee!!!

Like I said: The first placa surcharge for vehicles imported from the US (with their certification of % for origin, etc...) after Jan 2010 is illegal! Period!

So too are portions of the Itbis attached to it at ports...

And here was I believing that gringos were a notch above the average Dominican sanky, when it came to not letting the gov get away with their money!!

Show me those MBA's and PhD’s were not photocopied at Kinko’s!!!

Btw: I'll be taking a break from DR1 and the DR as well come January! I'm going back to Japan for a few months related to "work", if you want to call it something! LOL!!

 

[Afgan]

It has become wide spread in the local news media that vehicles imported from the US after Jan 2010 will not paid any duties, but that the gov will have in place the first placa and 16% Itbis instead. That most vehicles imported into the DR will not see any or sizeable reduction in price tag, mainly because they need to be at least 35% of US origins on manufactured materials used to make the vehicle and that we "import" mainly cars from other nations like Japan or Mexico, where US cars are made with little US parts or origin in them.

What you need to know:

According to DR-CAFTA the Dominican Republic was and is required to a phase reduction of import duties of US made cars, parts and related goods of that industry into the DR. As part of this the DR has been reducing in phases the duties from that country on cars and other major goods in relation to the sector.

As you might as well know already, the DR began to impose a 17% first placa (tag) tax on new vehicles that are registered in the DR. As such this favors Japanese imports and other major importers over that of individuals or biz people imports from the US. The US auto industry follows strict guidelines of safety and manufacture for the vehicles made for both the local and export industry. This makes US manufactured vehicles more expensive than others that need not meet that criterion, like Japan or Mexico today.

We currently allow imports of vehicles from Japan, which wouldn't even be allowed to run in their own roads, based on new guidelines the Japanese nation has ratified with the international community on the auto industry level of acceptable emissions. Not only that, but even vehicles with left handed steering wheels placements, were all too common in our roads.

Beginning on Jan 01 2010, the DR is mandated as agreed to dismount any and all types of duties or VAT on US vehicles and related goods to the industry. This is not negotiable and binds the country to it with the penalty of canceling the same benefits to all (read here not a few or selected) goods entry into the US markets from the DR.

If you import a vehicle manufactured in the US by any of the three major car makers in the country, those cars are eligible to enter duty free! No car manufactured by the major three is allowed to be built under even close to the 35% of origins made clear on the DR-CAFTA. They all go beyond that threshold margin.

Once the vehicle is in the DR, all you need to pay is docks and fees associated to the import process, which MUST be detailed at the time of shipment from the US*.

Once the vehicle is clear and you need to register it in the DR agency in charge of that process, if you're demanded to pay the 17% fee on first Placa and 16% on Itbis, you must demand a written request for that charge and contact the local consulate to have the documents validated (think notarized) as originals. Then you can go ahead and place a lawsuit in the US court from where the car was shipped against the Dominican State!

The DR-CAFTA agreement is binding and enforceable by even individuals of all walks of life in the US territory!!!

All you lawyers need are a copy of the DR-CAFTA agreement, with the DR only part needed to make the case. The documents notarized by the US representative in the DR, which were handed out to you by the DR's agency and the documents from the export company used in the US. Add to that the documentation given to you at the time of export by the DR's consulate to that end in the US as well.

Not only are the 17% first registration charges illegal but also the larger portion of the 16% Itbis as well!!!

The DR knows this is coming and its mulling reducing the first placa or tossing it away for security. I'm just giving it you as it is! If they try to stick it to you, this time around the US law is on your side!

Not only can you import US brands of vehicles, but any brand including Toyota and Nissan, manufactured in the US with over 35% of raw materials from US origins...

The US private banks like Citibank are interested in financing vehicles purchased in the US by US legal citizens or residents, to be taken immediate and continued to be paid in the DR!!!!

Since new vehicles can be recovered with ease from the DR with the DR-CAFTA agreement in place, the Banks are willing to put up with the exchange rates and all... When you buy a vehicle in the US which is financed via a bank like citi, they'll demand an initial deposit to recover the vehicle in the DR, should you fail to keep up with payments and default...

The implications of DR-CAFTA are beyond what many here can only begin to grasp! That's why (like I told you here untold times) INPOSDOM is undergoing major changes and partnering with other US postal services and carriers like the USPS, UPS, FEDEX and others...

Many goods will enter the DR market duty free this next year unlike now!

Like I said here, these are your rights as US citizens (Dominicans are banned from suing their own state there as part of the agreement, but can also sue the US or other DR-CAFTA countries just the same) to make use of!

OK! Gringos! A trabajar por ustedes y los Dominicanos!

Thank you for your honesty and for the very valuable and brave information, PICHARDO! I am sure you know what I mean! Count me in.

 

[El Rey de Mangu]

Pichardo,

A real winner pal! Just what I needed to pull in this investor on the hook! Go Pichardo, go!

Thank you for your time on this.

Rey de platano majao

 

[A.Hidalgo]

All you lawyers need are a copy of the DR-CAFTA agreement, with the DR only part needed to make the case. The documents notarized by the US representative in the DR, which were handed out to you by the DR's agency and the documents from the export company used in the US. Add to that the documentation given to you at the time of export by the DR's consulate to that end in the US as well.

Or you can do something less complicated and submit a complaint to the Trade Compliance Center of the U.S. Department of Commerce's International Trade Administration and keep money in your pocket rather than a lawyer.

Trade Compliance Center - Making America's Trade Agreements Work for You!

 

[Afgan]

The DR can claim their right (as described in the agreement) to place VAT in their domestic realm to goods imported equally to all equal goods imported from other countries to their defense. This is very much true and holds 100% in any disputed fact between the US and the DR, but for the same token the US can also place the same type of VAT in their domestic chain with tremendous impact to the DR side of that trade.

It's more of a question about who's more to benefit from the deal than not. Clearly for the DR to enter the US market directly is a priority it can't just toss aside in these economic times. The US can with ease do without the DR goods and won't feel a pinch over that and their interests for the region.

If what we have is morons in the administration of Fernandez today, which think they can pull the same veils they use to cover the eyes of lesser Dominicans (as they see them mostly) onto the eyes of the gringos, they better wake up and smell the coffee!!!

Like I said: The first placa surcharge for vehicles imported from the US (with their certification of % for origin, etc...) after Jan 2010 is illegal! Period!

So too are portions of the Itbis attached to it at ports...

And here was I believing that gringos were a notch above the average Dominican sanky, when it came to not letting the gov get away with their money!!

Show me those MBA's and PhD?s were not photocopied at Kinko?s!!!

Btw: I'll be taking a break from DR1 and the DR as well come January! I'm going back to Japan for a few months related to "work", if you want to call it something! LOL!!

******************************


I want to see our beloved PICHARDO President of Dominican Republic NOW !!!!!!!!!!!!!!!!!!!!!!!!!!

 

[RacerX]

pcihardo said: "As you might as well know already, the DR began to impose a 17% first placa (tag) tax on new vehicles that are registered in the DR. As such this favors Japanese imports and other major importers over that of individuals or biz people imports from the US. The US auto industry follows strict guidelines of safety and manufacture for the vehicles made for both the local and export industry. This makes US manufactured vehicles more expensive than others that need not meet that criterion, like Japan or Mexico today.

We currently allow imports of vehicles from Japan, which wouldn't even be allowed to run in their own roads, based on new guidelines the Japanese nation has ratified with the international community on the auto industry level of acceptable emissions. Not only that, but even vehicles with left handed steering wheels placements, were all too common in our roads.

I noticed that too and its genial to know that there is something being done about it.

 

[gringosabroso]

Buy an American car in June 2010? Good idea? Bad Idea?

I'm confused; perhaps I've been deliberately confused. I greatly enjoyed Pichardo's posts in this area. Well done. My questions & comments:

1. Assume that it's 1 June 2010: has the dust settled? What will the prices of American cars probably be? Compared to 1jun09?

2. Can a group of Americans living permanently in the DR [perhaps 20 - 40 - 60 -?] bring a class action under the arbitration law Pichardo cites; this should reduce the size of legal fees? & perhaps get the attention of the American Gov't?

3. Will 1 or more of the American banks waiting to finance the potentially lucrative new car loans finance the probably necessary litigation?

4. What will be the effects of DR-CAFTA on 1jun10 on the prices of cars existing in the DR on 31dec09, ie. physically in the DR? Sold? Unsold, in dealers' inventories? Your predictions?

4. I don't know to what extent the Japanese Gov't gives financial, social, or humanitarian aid to the DR. Will not the Japanese Gov't strongly protest the 'discrimination' against Japanese MVs resulting from DR-CAFTA? Brazil? Mexico? South Korea?

Thank you. Quite complicated!! I was a lawyer once. Nothing simple or speedy occurs in the DR!

 

[PICHARDO]

I have a very specific question:

Is the 17% "First Placa" and the parts of the ITBIS discussed above that allegedly violate DR-CAFTA charged equally on all auto imports from all countries, or just applied to US made cars?

It applies to all cars, depending on how it enters the country and from whom you buy it.

It doesn't matter whether the First Placa came in effect and applies to all vehicles (in regards to the US FTA), but the timing under which the VAT was put in place (which coincided with the reduction in phases mandated via the DR-CAFTA agreement). Add to that the Itbis (which in detail is a plural VAT segment itself) parts which also were applied liberally to car imports after a given time and not before the deal was signed and ratified by the DR.

Like I explained, US manufactured vehicles are in margin more expensive to build than other market suppliers, because the criterion used in that segment is for home (US) consumption. Cars produced to market in the US meet several federal guidelines and state enforced rules, which in other markets are not required; therefore those vehicles manufactured for the sole aim of those markets are not equipped as the ones for their own home market.

Dominicans import vehicles on sale for the home market in the US. The tally for these vehicles in our roads is larger than the import/sales sector offered locally. Those importers/dealers prefer to get their vehicles from cheaper options/lesser strict guidelines than the US, like Mexico, etc...

Think of this as if the DR entered a FTA with the US for foods, where the DR would then impose a new VAT to foods, previously not covered by that type of VAT, as the free trade agreement came into play.

The problem is not a pre-existing VAT in the car industry in the DR, but a VAT that was imposed after the DR engaged the US and partners in DR-CAFTA. This is illegal and against the spirit of the trade agreement by all nations ratified.

The US is going to carry out a trade mission for business opportunities in the Dominican Republic, in March 2010. Based on the prospects of the new phases within DR-CAFTA entering a new stage between the two nations.

They named two contacts in the U.S. Commercial Service as:


Lesa Forbes: lesa.forbes@N0SPAM.mail.doc.gov1
Ashley Wilson: ashley.wilson@N0SPAM.mail.doc.gov2

Flyer: http://www.buyusa.gov/caribbean/en/trademission-domrep_jam-flyer.pdf

Trade Mission to the Dominican Republic & Jamaica -- U.S. Commercial Service Caribbean

You can try and see if more detailed information based on the DR-CAFTA and the "first placa" + Itbis is being discussed /addressed by the US at this time!

 

[El Rey de Mangu]

It applies to all cars, depending on how it enters the country and from whom you buy it.

It doesn't matter whether the First Placa came in effect and applies to all vehicles (in regards to the US FTA), but the timing under which the VAT was put in place (which coincided with the reduction in phases mandated via the DR-CAFTA agreement). Add to that the Itbis (which in detail is a plural VAT segment itself) parts which also were applied liberally to car imports after a given time and not before the deal was signed and ratified by the DR.

Like I explained, US manufactured vehicles are in margin more expensive to build than other market suppliers, because the criterion used in that segment is for home (US) consumption. Cars produced to market in the US meet several federal guidelines and state enforced rules, which in other markets are not required; therefore those vehicles manufactured for the sole aim of those markets are not equipped as the ones for their own home market.

Dominicans import vehicles on sale for the home market in the US. The tally for these vehicles in our roads is larger than the import/sales sector offered locally. Those importers/dealers prefer to get their vehicles from cheaper options/lesser strict guidelines than the US, like Mexico, etc...

Think of this as if the DR entered a FTA with the US for foods, where the DR would then impose a new VAT to foods, previously not covered by that type of VAT, as the free trade agreement came into play.

The problem is not a pre-existing VAT in the car industry in the DR, but a VAT that was imposed after the DR engaged the US and partners in DR-CAFTA. This is illegal and against the spirit of the trade agreement by all nations ratified.

The US is going to carry out a trade mission for business opportunities in the Dominican Republic, in March 2010. Based on the prospects of the new phases within DR-CAFTA entering a new stage between the two nations.

They named two contacts in the U.S. Commercial Service as:


Lesa Forbes: lesa.forbes@N0SPAM.mail.doc.gov1
Ashley Wilson: ashley.wilson@N0SPAM.mail.doc.gov2

Flyer: http://www.buyusa.gov/caribbean/en/trademission-domrep_jam-flyer.pdf

Trade Mission to the Dominican Republic & Jamaica -- U.S. Commercial Service Caribbean

You can try and see if more detailed information based on the DR-CAFTA and the "first placa" + Itbis is being discussed /addressed by the US at this time!

Good work, Pichardo. Aren't you supposed to be Tokyo-bound?

 

[RacerX]

US cars would still have an advantage if it were not for their higher cost to manufacture because of US mandated smog and safety standards which are not required here. US manufacturers are not about to start making separate models for export just for the DR-CAFTA area. We will have to see what the US Trade Compliance Center has to say about all of this.

OK, so the benefit of this agreement is based on the percentage of US-generated materials used in the construction of the car? So Nissan benefits the same manner that GM would in a car assembled in the US? A Maxima or Regal composed of 35% American components gets the waived VAT? If this is true then it doesnt benefit American automobile makers but cars built in America? Toyota, Subaru, Chrysler, BMW, whomever? I thought this was to be a boon to American manufacturers.

What you said above about makers are not about to start making separate models for export to CAFTA countries I dont think is necessarily so. ALL of these guys have assembly plants all over the world, so its possible that they can create powertrains for certain areas. This is stuff they do already, cars being built for export have it programmed in the VIN number(the equipment package is built into the VIN). And since all new cars are computer controlled it is just a matter of changing the OS for the OBD in the ECM. Couple that with several models being built in different countries, like the Chevrolet Blazer(in New Jersey and in Brasil) or the Toyota Corolla(in Mexico and California), makes me ask what is to stop an maker from earning profits and conquering market share by ordering cars from the other units say GM Brasil holding them on an stockyard in South Florida say and then shipping them to CAFTA countries? Now these cars dont need to be upgraded to US standards because they wont be operated in the US, they essentially were imported from other GM divisions to be exported as new GM models to DR? The 35% material requirement can be litigatd away by claiming that the point of origin(said GM stockyard in Florida) constitutes an American produced automobile.

Or what everyone could do is import special market cars uncompleted into the US to be finished and then exported to that special market.

 

[Mason3000]

So what about the people who already bought US cars under the old rules, they lose?

 

[PICHARDO]

Good work, Pichardo. Aren't you supposed to be Tokyo-bound?

You're most welcomed! And no! My trip is for after the 31st of Dec not before! (read again my post):cheeky:

 

[PICHARDO]

OK, so the benefit of this agreement is based on the percentage of US-generated materials used in the construction of the car? So Nissan benefits the same manner that GM would in a car assembled in the US? A Maxima or Regal composed of 35% American components gets the waived VAT? If this is true then it doesnt benefit American automobile makers but cars built in America? Toyota, Subaru, Chrysler, BMW, whomever? I thought this was to be a boon to American manufacturers.

Yes as you pointed out here, those are the benefits for all manufacturing vehicles that incorporate over the mandated threshold for those cars; but one thing you fail to grasp, is that those same cars (which might as well be a Nissan or Toyota manufactured in US plants for foreign held companies) are made by US workers! The intended effect is that more US workers will benefit long term from this trade agreement, than others in place with other groups. The same happens in the DR as the supply market too!

What you said above about makers are not about to start making separate models for export to CAFTA countries I dont think is necessarily so. ALL of these guys have assembly plants all over the world, so its possible that they can create powertrains for certain areas. This is stuff they do already, cars being built for export have it programmed in the VIN number(the equipment package is built into the VIN). And since all new cars are computer controlled it is just a matter of changing the OS for the OBD in the ECM. Couple that with several models being built in different countries, like the Chevrolet Blazer(in New Jersey and in Brasil) or the Toyota Corolla(in Mexico and California), makes me ask what is to stop an maker from earning profits and conquering market share by ordering cars from the other units say GM Brasil holding them on an stockyard in South Florida say and then shipping them to CAFTA countries? Now these cars dont need to be upgraded to US standards because they wont be operated in the US, they essentially were imported from other GM divisions to be exported as new GM models to DR? The 35% material requirement can be litigatd away by claiming that the point of origin(said GM stockyard in Florida) constitutes an American produced automobile. Or what everyone could do is import special market cars uncompleted into the US to be finished and then exported to that special market.

They can't just be litigated to become "As good as" from that origin. There are certain rules that also apply to "point" or origin as well therein the trade agreement, which protects all markets involved from this type of "Dumping".

In effect the agreement contemplates that goods MUST be shipped (meaning sourced) from the member nation to the other, without transit (other than port redirecting) via another, even if a member too. That's to say that a car manufactured in Mexico with US parts that would comply with the basic threshold for origins in parts, would not be allowed to be imported to the DR as US goods under the agreement. The car MUST be in the US first and then be shipped to the DR market as final destination.
A car built in a Mexico plant for GM or Ford, etc... Just can't be shipped from that country into the DR enjoying the terms under the DR-CAFTA agreement!

Cars manufactured for export in those countries are not covered under the rules compounded within origins via DR-CAFTA... Even while US branded!
That's why even a Nissan or Totoya, both manufactured in the US with plenty of US parts (beyond that of required under DR-CAFTA) can benefit from the agreement. This is in detriment to the Japanese manufacturing and labor industry! That's why for Japan is now more important to seek an equal free trade deal, so that they to can benefit their home labor and industry with the demand for autos in the DR.

 

[PICHARDO]

I'm confused; perhaps I've been deliberately confused. I greatly enjoyed Pichardo's posts in this area. Well done. My questions & comments:

1. Assume that it's 1 June 2010: has the dust settled? What will the prices of American cars probably be? Compared to 1jun09?

With the current first placa and Itbis still in force? The same!

2. Can a group of Americans living permanently in the DR [perhaps 20 - 40 - 60 -?] bring a class action under the arbitration law Pichardo cites; this should reduce the size of legal fees? & perhaps get the attention of the American Gov't?

For that each individual must do the same and import a vehicle under the same conditions described as well. Possible? Yes! Bound to happen? I highly doubted!

3. Will 1 or more of the American banks waiting to finance the potentially lucrative new car loans finance the probably necessary litigation?

For banks to start extending loans to Dominicans in the DR under the DR-CAFTA agreement, the above problem must have been put to rest 100%.

4. What will be the effects of DR-CAFTA on 1jun10 on the prices of cars existing in the DR on 31dec09, ie. physically in the DR? Sold? Unsold, in dealers' inventories? Your predictions?

Very little... That's why they didn't remove the first time placa illegal VAT or parts of the also illegal Itbis before the agreement phase initiates in 2010...

4. I don't know to what extent the Japanese Gov't gives financial, social, or humanitarian aid to the DR. Will not the Japanese Gov't strongly protest the 'discrimination' against Japanese MVs resulting from DR-CAFTA? Brazil? Mexico? South Korea?

They're already working on a limited free trade agreement with the DR too...

Thank you. Quite complicated!! I was a lawyer once. Nothing simple or speedy occurs in the DR!

I agree with that 100%!

 

[gringosabroso]

Thank you, Pichardo!!

An extremely well organized & detailed response!! Well done.
* The Obama administration is always appointing a "czar" to deal with any economic or financial problem perceived by his administration.
I am recomending that Pichardo be appointed "DR Car Czar"!
* My suggested salary for Pichardo? US $125,000. / year, + 6 weeks vacation, + a $90,000 pension after 10 years! Are you available?
* If so, email Rahm Emanuel or Joe Biden!

 

[A.Hidalgo]

The application does not include the VAT tax (ITBIS) and the Selective Consumer Tax. Vehicles have to pay the VAT taxes and the first license plate.

More info about this here Vehicles and merchandise enter duty free in 2010 - DiarioLibre.com

and here http://www.dominicantoday.com/dr/economy/2009/12/30/34346/Duty-free-for-imported-vehicles-in-2010

 

[A.Hidalgo]

An extremely well organized & detailed response!! Well done.
* The Obama administration is always appointing a "czar" to deal with any economic or financial problem perceived by his administration.
I am recomending that Pichardo be appointed "DR Car Czar"!
* My suggested salary for Pichardo? US $125,000. / year, + 6 weeks vacation, + a $90,000 pension after 10 years! Are you available?
* If so, email Rahm Emanuel or Joe Biden!

Needed a good laugh today. Just made my day.:laugh:

 

[amparocorp]

the big laugh is that diario libre says the savings benefit will be passed on to consumers..........