The Customs Department has announced its detection of a RD$100-million smuggling operation involving items being dishonestly imported into the country. Most of the items have been confiscated at the new security-enhanced Caucedo Port. The items have been the subject of investigation for the past two months, or since the government handover. Appliances valued at RD$100 million would have entered the country as generic parts, under the privileges granted by Law 28-01 that provides generous tax exemptions for companies manufacturing in the border provinces.
Luis Sanchez, the deputy operations director of Customs, and Gabino Jose Polanco, a tax collector at the port, said in a press conference that they had verified 100 containers and determined that their contents were not as described in the import documentation, but rather television sets, stoves, musical equipment, refrigerators, fans and other appliances imported from China. The shipments are consigned to the companies Electro del Nordeste, Inversiones Mayi and Electricosa del Mundo, located on the border, as reported in the Listin Diario.
Law 28-01 enables businesses to import raw materials, machinery and equipment for use in industries manufacturing in these zones, tax-free for 20 years. Sanchez said, however, that Law 34-89 establishes that any person attempting to import or retrieve merchandise through fraudulent methods will be subject to the confiscation of the merchandise. Furthermore, he said that Law 28-01 establishes penalties of six months to two years in prison or the payment of a fine equal to double the amount of the taxes evaded, or both penalties, including the confiscation of the products. The merchandise would have paid approximately RD$70 million in taxes.
Sanchez explained that Ruling 496-02 of Law 28-01 establishes that only machinery, equipment, spare parts and accessories not produced in the country may be tax exempt. The tax exemption does not apply to finished or semi-finished parts. It furthermore says that the tax exemptions are not for finished consumer products that enter fully or partially assembled. Sanchez said that merchandise that is just to be packed in the country is similarly ineligible.