President Leonel Fern?ndez yesterday sent to Congress for ratification the Financial Services Protocol, underlining his commitment to trade liberalization. The Protocol is a supplement to the 1994 Uruguay Round trade liberalization agreement package overseen by the Geneva-based World Trade Organization (WTO). The Protocol itself was first agreed in 1995 after arduous negotiations, and then amended in 1997 at the insistence of the U.S. to include more countries and better market opening commitments. The actual Dominican commitments under the Protocol are rather limited in scope. For example, although the DR will allow foreign companies to enter any portion of the Dominican insurance sector, the DR is one of only eight countries (out of 102) that will not allow insurance services to be offered across borders (i.e., a Miami-based or San Juan-based firm to insure people or businesses in the DR), and it is one of only five nations that will not guarantee the right of foreign firms to have majority control of their Dominican insurance subsidiaries. The DR likewise does not guarantee the right of 100% ownership of subsidiaries in the banking and securities sectors, although a few banks operating in the DR (Bank of Nova Scotia, Citibank) are 100% owned by foreign banks. It will guarantee "right of establishment" for banks – i.e., no barriers in setting up a Dominican operation as long as they meet the same requirements as local firms – but not for securities firms.
