Cross-border transactions are becoming increasingly common in the Dominican Republic. As is well known, legal considerations play an important role throughout the process of bringing these transactions to fruition. However, it is increasingly frequent for companies, investors, and even legal professionals to confuse international standards with actual legal obligations. This situation can lead to poorly structured contracts and, consequently, unnecessary risks and legal contingencies.
What is legally binding is always a practical necessity for any operation involving exports, imports, foreign investment, or the provision of international services to or from the Dominican Republic. It is important to remember that non-compliance with rules that carry binding legal force generates consequences enforceable before Dominican courts or administrative authorities.
The Dominican Republic has a robust legal framework that provides legal certainty, including: the Constitution of the Dominican Republic as the supreme norm; the Civil Code; the Commercial Code; the General Corporation Law; Public International Law; Private International Law; regulations, decrees, and administrative resolutions issued by competent authorities (such as the DGII, DGA, Central Bank, MICM, among others); international treaties; etc.
When we refer to soft law, we mean instruments that are not legally binding in themselves but that significantly influence the negotiation, interpretation, and execution of international contracts connected to the Dominican Republic.
In Dominican practice, soft law includes standards of best practices in compliance, corporate governance, sustainability, and international trade; codes of conduct and sectoral self-regulation frameworks; Incoterms (International Commercial Terms) of the International Chamber of Commerce (ICC); as well as guidelines and principles from international organizations such as the Organisation for Economic Co-operation and Development (OECD) and the United Nations Commission on International Trade Law (UNCITRAL).
It is worth noting that soft law does not replace Dominican law or contractual agreements, but in some cases it may become legally binding if expressly incorporated into a legal act; if used as an interpretative criterion accepted by judges or arbitrators; or if indirectly required by counterparties, financiers, or regulatory authorities.
The most common example is Incoterms:
They are not part of Dominican positive law, but they become fully binding when contractually adopted by the parties (FOB Incoterms® 2020, CIF Incoterms® 2020, etc.).
In many cases, the problem is not the absence of rules, but rather the lack of clarity regarding their legal nature. The role of the lawyer in international operations to and from the Dominican Republic is to: i) identify which rules apply automatically (legally binding); ii) determine which instruments merely provide guidance (soft law); and iii) understand the client’s objective in order to strategically decide what to incorporate and what to exclude in an international contract.
The true value of legal counsel lies in providing clients with a modern contractual practice that demands precision and a strategic reading of the sources of law.
