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Daily News - 22 November 2002

What the new Monetary Code brings
El Caribe newspaper highlights today the changes that will be brought about by the new Monetary and Financial Code. The code has been passed by Congress but is awaiting its ratification and publication by the Executive Branch to become law. The code will replace legislation that dates back to 1947. In essence, the code will regulate a series of measures already being implemented by the financial authorities but that were not backed by any legal framework. 

According to El Caribe newspaper, the principal areas of change are as follows:

The 1947 legislation says that the peso has a value equal to that of one US dollar. The new code establishes that the currency will float in relation to foreign currencies and be subject to market forces. El Caribe points out that the new code does not mention the name of the Dominican currency - the peso - leaving open the future possibility of it being replaced by the US dollar. 
It countermands Law 251, instated in 1974, and bans the use of exchange controls on behalf of the government. It guarantees free currency convertibility and specifies that the present exchange commission of 4.75% should be eliminated no later than one year after the passing of the law, as the surcharge is seen as an obstacle to free convertibility. 
It establishes that interest rates will also fluctuate according to the market. The legal framework in effect had set a maximum interest rate of 12%. 
The Banco Nacional de la Vivienda will no longer control the operation of loans and savings organizations, which will now be under the supervision of the Central Bank. The BNV will handle the Central Bank’s Definpro long-term loans programs for industries and farming projects. 
As of July 2004, the governor of the Central Bank and members of the Monetary Board will not be eligible to be removed from their posts until the end of their two-year terms. 
As of 30 January 2003, the Central Bank will be obliged to publish a January monetary program to establish the annual goals for currency devaluation or appreciation, inflation, and economic growth. 
The new law will considerably, although not absolutely, limit the credit lines the Central Bank may extend to the government and its agencies. 
The Central Bank will be required to secure congressional approval in order to borrow in foreign currency, with the exception of loans from the International Monetary Fund.
Contracts signed in the DR in foreign currency will be regarded as legal. 
The regulation of tourism businesses on the North Coast previously under the jurisdiction of the Central Bank will be overseen by the Ministry of Tourism. 
The Monetary Board may be called to appear before a Tribunal Contencioso-Administrativo, a special court created expressly for this purpose. 

A Listin Diario editorial points out that the greatest achievement of the new monetary code is that it will oblige the Central Bank and the Superintendence of Banks to adhere to measures that will create a greater transparency regarding mechanisms and public interest decisions. 


President to Japan and Taiwan
The Presidential Press Office announced that President Hipolito Mejia will travel to Japan and Taiwan for 10 days starting next week. He is scheduled to depart on Sunday, 24 November and will arrive in Tokyo on Tuesday, 26 November for the first leg of his trip. On 1 December, he is scheduled to fly to Taipei and on 3 December returns to the Dominican Republic via New York City, where he will stopover for various meetings prior to his return to Santo Domingo. 
Officials scheduled to accompany him are Minister of Foreign Relations Hugo Tolentino Dipp, Minister of Tourism Rafael Subervi Bonilla, Minister of Environment Frank Moya Pons, and Ambassador Danilo del Rosario, director of the foreign investment office. Also on the official delegation are Dominican ambassador in Japan, Fausto Sicard Moya, and Dominican ambassador in Taiwan, Miguel Hernandez. 
The presidential director of protocol, Ambassador Carlos Guzman, and press director Luis Gonzalez Fabra, as well as the chief of his military aide corps, Major General Rafael Betances Nivar, will also accompany the President. 
Special guests will include businessmen Eduardo Lama, Ramon Menendez, Felix Garcia, Rafael Gomez, Koki Sato, Victor Gonzalez and his nephew, Sergio Grullon Mejia, who is in charge of the Technological Institute of the Americas at the Cyberpark. 
Additionally, the President has invited several members of the military that are descendents of Japanese immigrants to the Dominican Republic - Colonel Koji Maruyama Maruyama of the Army, Minoro Matsunaga of the Police, and Kensuke Ureno and Taiche Ureno of the Navy.
In Tokyo, President Mejia will hold meetings with several Japanese agencies, among which are the Japanese Bank for International Cooperation (JBIC), Japan International Cooperation Agency (JICA) and the Japan External Trade Organization (JETRO). 
President Mejia is also scheduled to meet with the Japanese Prime Minister, Junichiro Koizumi, at the official residence and a banquet is to be held in his honor. 
On Thursday, 28 November, President Mejia will visit the National Diet of Japan for meetings with the Speaker of the House of Representatives, Tamisuke Watanuki, and the President of the House of Councillors, Hiroyuki Kurata. 
The visit will furthermore include a meeting with The Emperor of Japan, His Imperial Majesty Akihito, at the Imperial Palace, followed by a trip to Osaka on 29 November to visit industrial installations and research centers. He will also stop in at Kansai University in Osaka, where he will receive a doctor honoris causa award. 
Finally, Mejia will travel to Taiwan on 1 December, where he will be officially welcomed in a ceremony at the Chiang Kai Shek Memorial Plaza, with President Chen Sui-bian of Taiwan on hand to receive him. While there he will also visit parliament and have lunch with Legislative Speaker Yuan Wang Jin-pyng. In Taiwan Mejia is scheduled to sign a memorandum to enhance technological training in the Dominican Republic.

President to fly commercial airliners
Diario Libre reports that President Hipolito Mejia has announced his plans to travel on commercial flights. The announcement puts an end to the apparently free-handed spending involved on his previous travels abroad, including reports of overcharging for the lease and purchase of airplanes and helicopters supposedly used for his advance team. 
Despite being very critical of his predecessor’s travels abroad, President Mejia now holds the highest record for travel of any Dominican statesman during the course of his mandate. Furthermore, while President Mejia had said at the start of his travels that he and the official delegations would only travel economy class, the practice was quickly replaced by private jets, leased at a very high cost to the state. 
Napoleon Padilla, head of the Travel Unit of the Presidency, announced that the decision to revert back to commercial air travel could save the country an estimated RD$70-million a year, according to a report in Diario Libre. 
Padilla said that the trip to Tokyo and Taiwan would cost RD$95,000 for the first class round trip ticket. 
Mejia also announced he would no longer fly aboard jets lent to him by private businessmen, either. 
Padilla explained that the government has kept no record or control of the previous trips taken by government officers. “Before, funds would be taken from anywhere to carry out the trips, but this will no longer be possible,” he said. 
The 24 November trip to Tokyo and Taiwan will be the President’s 34th voyage abroad. However, this time the President will be flying American Airlines, according to the press office. 

More on the Colibri helicopter
According to El Caribe, legal case records show the former head of security for the presidential advance team, Colonel Pedro Julio Goico stated that the Colibri helicopter under investigation by the Air Force for its suspicious use, was purchased for US$1,050,000 by an engineer named Jose R. Lopez. The engineer supposedly gave an advance payment to the importing firm of Fenix S.A. Lopez, who then authorized Pedro Julio Goico to manage the craft. The helicopter is not registered with the Dominican Civil Aviation Board, even though it was ostensibly designated for the official use of the advance team, for the transport of VIPs, and to escort the President’s helicopter when no Air Force helicopter was available. The government reportedly leased the airplane from the private company.
The newspaper reports that even though the helicopter was under the ownership of a private citizen, the helicopter’s pilots were military; Captan Bartolo de la Cruz and First Leiutenant Ivan Acosta Dominici of the Air Force were sent to Houston, Texas to train to fly the Colibri helicopter. Goico said he was the intermediary between the company that sold the helicopter and the Dominican buyers. Reportedly US$600,000 is still owed on the helicopter. 
The government investigators have remained silent regarding the supposedly irregular operations of the helicopter that caused it to be grounded at the San Isidro Air Force Base.

Goico case receives correctional grade
The four individuals arrested in the Pepegate case involving RD$40-million in Baninter credit card fraud will soon be free on bail. The District Attorney, Maximo Aristy Caraballo, downgraded the case from “criminal” to “correctional”. The central figure in the case, and for who the scandal was named Pepegate, Pedro Julio Goico Guerrero was arrested for suspected fraudulent use of a credit card issued in his name to pay for presidential expenditures primarily for the President’s trips abroad. This would be the second time Goico has been released on bail; when President Hipolito Mejia, shortly after he took office, named Goico as his security chief, the colonel was free on bail for his involvement in a RD$90-million National Lottery fraud case. 
Listin Diario reports that Maximo Aristy Caraballo based his decision on the fact that the government’s finances had not been affected. The military commission that investigated the case reportedly determined that bank officer and recent recruit to the military Alberto Sebastian Torres Pezzoti was the sole culprit for the fraud. The Baninter bank has said the insurance company would reimburse the charges.
Attorney General Virgilio Bello Rosa criticized the decision, saying the evidence overwhelmingly demanded that the case be graded as criminal.

An end to governmental phone espionage?
The presidents of Tricom, Centennial, Orange and Codetel were present at a press conference held yesterday at the Dominican Institute of Telecommunications, Indotel. Together with Orlando Jorge Mera, they announced the government decision to leave without effect Resolution 91-02, the ruling that had previously authorized security organizations to intercept private telephone calls. Resolution 91-02 had replaced Resolution 36-00, which limited government telephone intervention by requiring a judicial mandate to intercept any call, and only in cases which were perceived to be matters of national security. The telecom companies took the government to the Supreme Court of Justice, alleging that Resolution 91-02 violated the constitutional rights of their clients and the norms that are part of the General Law of Telecommunications 153-98. 
Cesar Medina, in his column in the Listin Diario, gives more insight into what was behind Resolution 91-02. According to Medina, none other than former presidential security chief, Colonel Pedro Julio (Pepe) Goico, had, early on in the Mejia government, purchased a sophisticated US$4-million telecommunication system in Israel with the capacity to tap into 150 phones simultaneously, 24 hours a day, 365 days a year. The plan was to connect this system to Codetel, Tricom, Centennial and Orange systems.

International arbitration in Union Fenosa case?
Superintendent of Power Julio Cross said that as a Dominican consumer, he would like to take the case of the Union Fenosa distributor companies to international arbitrage. He said that in doing so, the manner in which these companies have handled themselves would be out in the open. He said that the company has not been managed in the interest of the Dominican state, the owner of 49.9% of the shares of the capitalized power distribution companies. 
He questioned the recent statements made by Mario Lopez, general manager of Union Fenosa’s Edenorte and Edesur distribution companies, that the companies had no intentions to leave the country or to sell their shares in the power distribution sector, when they have publicly stated that they are losing thousands of millions of pesos in their Dominican operations. 
The statement was made in response to a Senate proposal to buy back the shares using sovereign bond placement money.

What do the Senators want?
Diario Libre newspaper, on its back-page cover, speculates that the Senate must want something special from President Hipolito Mejia to have taken such a strong stand against passing the Central Electoral Board reform bill. This bill resulted from the National Debate held at the Pontificia Universidad Catolica Madre y Maestra and was an agreed-upon solution to the political impasse regarding the election of board judges perceived to be partial only to the ruling faction of the PRD party. Diario Libre says that the Chamber of Deputies is just awaiting the bill to give it the green light. The opposition parties have conditioned passing initiatives such as the sovereign bond placement sought by the Mejia government on the passing of the JCE reform bill.

Dollar reaps RD$21
The US dollar broke the RD$21 to US$ mark for the first time this week. Exchange banks were cashing at RD$20.80 and RD$21 to the US$. The official Central Bank rate currently stands at RD$20 to US$. So far, the peso has devaluated more than 18% this year, however with the passing of the new Monetary Code, the government will be obliged to let the peso float.

Gas stations ban credit card sales
Consumers will no longer be able to use their credit cards to purchase gasoline and diesel at local gas stations. In protest to the increase in the commissions charged by banks, the association of gas stations announced that its members would only accept cash payments, payment agreements or their own company’s issued credit cards. Spokesmen for the gas stations say that since they cannot transfer the increased cost on to consumers, because gasoline and diesel are sold at prices fixed by the government, they chose not to accept credit card payments any longer.

The rescindment of the Meridian agreement
The Organizing Committee of the 2003 Panamerican Games has announced the rescindment of the games’ exclusive marketing media contract with Meridian. Juan Jose Rodriguez, of the Listin Diario, asks what will happen to the US$225,000 downpayment that was supposedly paid to Meridian. 
The sports director for the games, Bienvenido Solano, said that the contract was rescinded because the company did not fulfill its commitment, nor did it sell a single sponsorship. He explained that Meridian would stay on as a sales representative and would be allowed to continue to market the games. 
Meridian was described by the Olympic Committee as the organization that had done the media marketing for the Panamerican Games held in Winnepeg and the Sydney Olympic Games.

Central American & Caribbean Games
Athletes and delegates have begun to arrive in Santo Domingo for the handball, racquetball and shooting competitions of the Central American and Caribbean Games. With the exception of the above named competitions, most of the Central American & Caribbean Games events are taking place in El Salvador. 
Teams from the Netherlands Antilles, Barbados, Belize, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Puerto Rico, Trinidad & Tobago, Venezuela and the Dominican Republic will be competing in the DR. They will be lodged at the Don Juan hotel in Boca Chica, and the Hispaniola and Lina hotels in Santo Domingo. 
Shooting will take place at the new world-class Duquesa shooting facility, the racquetball at the Santo Domingo Country Club, and the handball events at a facility at the Mirador del Este Park.

INXS and Top 40 at Altos de Chavon
The Australian rock group INXS is scheduled to appear at the Altos de Chavon (La Romana) amphitheater on Saturday, 23 November. Opening the event will be a local rock band, Top 40. INXS is best known for its classic hits Original Sin, New Sensation, Need You Tonight, and Never Tear Us Apart, among many others. The INXS show will be transmitted to the world via live web cast by the California-based Internet Company, LiveVenu. 
For more information about the web cast, visit INXS's website, at: http://www.inxs.com
For information on Top 40, see http://www.dr-top40.com
 
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