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Mr. Elbio Rosselli
Dear Mr. Rosselli:
I am writing in response to your letter dated May 14, 2004, requesting a response from the Fund under Paragraph 8 of the Cooperation Agreement between the Fund an the WTO to the questions raise by the Panel that was established on January 9, 2004 in order to examine measures imposed by the Dominican Republic on the importation an internal sale of cigarettes.
1. You have asked that the Fund provide information as to how the "Comisión Cambiaria a las Importaciones" (the "exchange commission") is being implemented by the Dominican Republic. Based on both our review of the relevant regulations and our consultations with the authorities of the Dominican Republic, we can advise you as follows:
2. You have also asked whether the exchange commission, as currently applied by the Dominican Republic, is considered by the Fund to be an "exchange control" or "exchange restriction" under the Articles of Agreement of the International Monetary Fund.
As applied since August 2002, the exchange commission is no longer a measure subject to Fund approval. As noted above, the commission is no longer payable on sales of foreign exchange. It is payable as a condition for the importation of goods and the amount to be paid is based on the CIF value of the imported goods (rather than the amount of foreign exchange sold to an importer for the payment of goods). As such, it does not constitute a multiple currency practice or an exchange restriction notwithstanding its label or the fact that the commission is charged on the basis of the legal authority vested in the BCRD to charge an exchange commission on sales of foreign exchange. For the same reasons, it is not an exchange control measure.
In light of the above, the Fund has determined that the exchange commission is
not an exchange measure. Therefore, the issue of its consistency with the Fund's
Articles for purposes of Paragraph 8 of the Cooperation Agreement does not