During the last few years, telecommunications has been one of the most dynamic sectors of the Dominican economy. The General Telecommunications Law has modernized the telecommunications industry, adapting it to the parameters established by international organizations such as the World Trade Organization (WTO) and the International Union for Telecommunications (UIT). Dominican law regulates the installation, mainte- nance, and operation of Web sites, the rendering of services, and the supply of telecommunication equipment to guarantee that telecommunication services are accessible to the whole population, to promote free com- petition, and to promote the development of this industry. The Dominican Institute of Telecommunications (INDOTEL), which began operations in 1999, seeks to ensure the application of the law and the organization and promotion of the telecommunications market. Dominican law also establishes the legal and technical framework for the regulation of both AM and FM broadcasting.
BANKING
The current banking regulation provides for the operation of different types of entities within the financial sys- tem such as: Multiple Banks, Credit Entities, Savings and Loan Associations, and Savings and Credit Banks. The law opens up the financial industry by granting equal treatment to foreign financial intermediaries with local institutions, establishing the parameters for their ability to operate in the Dominican Republic. Likewise, it authorizes foreign banks that are not domiciled in the country to establish representative offices in Domin- ican territory, in accordance with existing statutes. The establishment of financial intermediaries is subject to the approval of the Monetary Board, subject to the favorable opinion of the Banking Superintendent. With respect to banking regulation, the law has taken into account modern international trends. To promote the stability and security of the system, our legislation follows the Basel’s principles I and II and has a strict compliance and close supervision system operated by the financial and monetary authorities. The law reaffirms the obligation to deposit, at the Central Bank, liquidity reserves under the system called “le- gal reserve” (encaje legal). It establishes mandatory norms with the objective of facilitating the supervision of financial entities; creates strict requirements for adequate corporate governance; and establishes a pre- ventive supervision model based on a process of follow-up on the minimum conditions of liquidity and solven- cy to avoid regulatory insolvency. In this regard, the law states that compliance with these requirements is mandatory for all financial institutions.