DMK Abogados of the Dominican Republic held a seminar-workshop titled “Complying with Tax Obligations in the Tourism Sector and Its Value Chain In The Light Of the Money Laundering Act” on September 19, 2018 during the XXXII Trade Fare organized by the Dominican Hotel and Tourism Association – ASONAHORES, with partners and associates of the firm actively participating.

Jones Day´s Global Disputes and Financial Institution & Regulation Partner, Ricardo Puente, who´s practice is focused on litigation and international arbitration, was a guest speaker of DMK Abogados.

Acting as the moderator of the seminar was Managing Partner, Enrique De Marchena, a “leading figure” in the country´s tourism sector, who expressed concern in how the new anti-money laundering law is affecting businesses conduct their everyday transactions. ”It´s true that the investment climate in the country has changed after the enactment of the law, as many businessmen see it as a threat, in particular economic sectors like real estate,  automobiles, among others, but it´s also true that the country didn’t have any other choice” said Mr. De Marchena. “Transparency and compliance are concept that are here to stay. It will be the proper application of the law by the authorities and the respect of the due process that will have the final word.”

Patricia Read, Partner at DMK Abogados, addressed the changes this Law brings compared to the one passed in 2002. “This law includes much more predicate offences, tougher sanctions, more obligations to regulated entities, and adds more activities and professions to the regulated entities category”. Patricia Read also talked about the risk of not conducting an appropriate Know Your Provider to your suppliers. “You could be sanctioned for making deals with entities and people who are convicted of money laundering, even though you didn´t know about this illegal activity. It was your duty to investigate under the new Law”.

“Knowing you client is not enough!” intervened Mr. De Marchena, “you need to investigate and make sure the information given to you is accurate and correct”.

The highlight of the seminar, the tax implications under the new Anti-Money Laundering Law, was conducted by DMK Abogados´ up and coming star associate, Andres Ceara. He spoke about the introduction of tax crime in the new anti-money laundering predicate offences in the new Law.

Although recent newspaper articles have stated that tax evasion will be persecuted under the new Law, Mr. Ceara stated, “the public is being misled by the media, tax evasion is not the same as tax crime”. Tax evasion does not constitute a previous offence under the new Law and is only pursued by the Tax Authority, while Tax Crime is a judicial issued resolved in the country´s criminal courts”.

 Andres Ceara added that “although Hotels are not regulated entities under the new law,many of the activities provided by Hotels related entities or business are regulated, such as jewelry stores, casinos, real estate agencies and construction and therefore should take preventive measures and incorporate them to the corporate governance of the company”.

Ricardo Puente, legal expert whose clients include both financial institutions and investors, provided a glimpse of the global experience in this matter and said “the tourism sector is so big and involves so many jurisdictions; the best way to address this is under a global scope and not as a local matter or exclusively as a national issue”. Mr. Puente explained the evolution of anti-money laundering regulations and laws in the United States, and the biggest cases so far.

Attendees of the seminar included big names in the tourism industry of the country, including presidents, vice presidents, members of the board and legal representatives of major Hotel chains such as Grupo Punta Cana, AMHSA Marina, Bahía Principe Hotels and others. Also present were prominent public figures of the area.

DMK Abogados is a Chambers & Partners´ Leading Firm, which specializes in Real Estate & Tourism, Corporate & Commercial, Finance, Distribution & Agency, Litigation, Labor and Intellectual Property Law.