Spotlight: key liability issues for the aviation sector in Dominican Republic

All questions

Licensing of operations

i Licensed activities

Pursuant to the provisions of the Civil Aviation Law, all activities relating to civil, national or foreign aircraft, their owners, operators, crew, passengers and cargo, and any person involved in aviation activities within the Dominican territory that departs from, lands on, overflies or in any other way falls within the jurisdiction of national sovereignty, will be regulated by this law and will be subject to the jurisdiction of the JAC, the IDAC and the CESAC.

The following types of authorisation are granted by the above-mentioned institutions:

1. economic authorisation certificate for national air carriers;
2. operation permit for foreign air carriers;
3. air operator certificate for national air carrier;
4. consignee licences;
5. aircraft registration for national aircraft;
6. mortgage registration for national aircraft;
7. charter flight authorisations;
8. code-share agreement authorisations;
9. security manual approval; and
10. operations specification approval.

Most of these authorisations must be renewed after a specific period. For example, the operation permit must be renewed every three years. In addition, most of these authorisations require that the air carriers keep current their security manual, corporate documents and tax obligations in the Dominican Republic and payments to the corresponding authorities.²¹

ii Ownership rules

In principle, international public air transportation services are reserved for Dominican air operators. Such services may be granted to foreign air operators when the Dominican Republic has signed and ratified agreements or treaties with the country of origin of the requesting foreign air operator.²²

Pursuant to the provisions of the Civil Aviation Law,²³ to be considered a national air carrier, companies incorporated and in existence pursuant to the laws of the Dominican Republic must also comply with the following requirements:

1. at least 35 per cent of the company’s capital or substantial property shall be owned by Dominican physical persons or entities, and 35 per cent of the members of the board of directors shall be Dominican;
2. at least 51 per cent of the company’ managers (who are not members of the board) must be Dominicans;
3. the principal place of business shall be located in the Dominican Republic; and
4. 100 per cent of the company’s capital may be owned by foreign investors, as long as the investment belongs to an internationally recognised foreign air carrier or to a branch controlled by such an air carrier, authorised by the executive branch of government.

To obtain the corresponding certificate of economic authorisation, the JAC requires that national air carriers file the following documents (among others):²⁴

1. certified copies of the company’s corporate documents;²⁵
2. request form issued by the JAC;
3. power of attorney of the local representative of the applicant (if applicable);
4. certification of no criminal record, issued by the General District Attorney’s Office, for each shareholder of the company;
5. evidence of approval of the company’s Security Manual by the CESAC;²⁶
6. original insurance policy on civil liability, issued in accordance with the requirements of the JAC;
7. passenger compensation policy;
8. the company’s financial statements corresponding to the previous fiscal period;
9. business plan and feasibility study including, among other requirements, an operational study showing the capacity to operate the business (aircraft, capacity, human resources, etc.), a financial study showing the financial capacity to operate the business and estimated results for the upcoming months;²⁷
10. certification issued by the Social Security Treasury (TSS) confirming their enrolment;
11. copy of the taxpayer identification card;
12. copy of the company’s current version of the mercantile registry certificate;
13. annual declaration of income tax (IR-2) presented before the Internal Taxes General Directorate (DGII), if applicable; and
14. certification issued by DGII confirming that the company is up to date with the payment of its fiscal obligations.

iii Foreign carriers

Foreign air carriers interested in operating in the Dominican Republic shall be duly approved to carry out international air transportation services by the corresponding civil aviation authorities of their country of origin. In addition, it is necessary that a bilateral agreement between the country of origin and the Dominican Republic has been executed and ratified. In the event that a bilateral agreement has not been executed, the foreign air carrier must present proof of reciprocity issued by the government of the country of origin in favour of Dominican air transportation companies.²⁸

Once the existence of a bilateral agreement or proof of reciprocity with the Dominican Republic is confirmed, all foreign air carriers are required to obtain the following authorisations to operate: (1) establishment of a branch; (2) a certificate of compliance with the aviation security standards (AVSEC) requirements issued by the CESAC; (3) operation permit issued by the JAC; and (4) an acknowledgement certificate issued by the IDAC.

These requirements may vary depending on the capacity of the aircrafts that will be operated.

Establishment of a branch

To establish a branch in the Dominican Republic, a foreign air carrier must obtain a mercantile registry certificate and a taxpayer identification number. This process takes approximately two months but in certain cases can take less time. Once this process is completed, the foreign air carrier must proceed with filing the application for the obtainment of the corresponding operation permit from the JAC.

Certificate of compliance with the AVSEC requirements, issued by the CESAC

To obtain the certificate of compliance, foreign air carriers must file their security manual for their operations in the Dominican Republic in Spanish. This process may be undertaken jointly with the application for the operation specifications approval, and usually takes 60 days.²⁹

Operation permit issued by the JAC

Before the JAC grants the operation permit it will evaluate whether the foreign air carrier is qualified and competent to carry out international commercial air transportation services, and complies with the provisions of the Civil Aviation Law. To fulfil these requirements, the foreign air carrier must file the following documents:

1. authorisation for the exploitation of the requested routes from the country where the foreign air carrier is established;
2. request form issued by the JAC;
3. incorporation documents of the foreign air carrier (certificate of formation, operating agreement, articles of association, etc.) notarised and legalised at the nearest Dominican consulate (or legalised according to the Apostille Convention, if applicable);
4. power of attorney for the local representative, duly notarised and apostilled;
5. copy of the branch’s mercantile registry certificate;
6. copy of a valid air operator certificate;
7. original of the insurance certificate;
8. certificate from the CESAC indicating that the foreign air carrier’s security complies with the AVSEC requirements;³⁰
9. copy of the taxpayer identification card;
10. passenger compensation policy;
11. marketing study of the requested routes indicating passenger projections, cargo (demand), competence analysis (the different airlines that cover these routes), destination (offer), market shares and the schedule of the requested routes;³¹ and
12. payment of a fee of US$5,000.

The JAC may request additional documents or information that it considers necessary. Once the filing is completed, the JAC legal department will review the request and submit it for the approval of the board at its next meeting. The board usually holds two meetings per month. The JAC approval takes approximately 45 days from the filing of all the documents. The operation permit will be valid for three years. Once this process is complete, the foreign air carrier must proceed with the application for the operation specifications from the IDAC.

Acknowledgement of a foreign operator certificate issued by the IDAC

To obtain the acknowledgement of a foreign operator certificate, the following documents and information will be required:

1. the company’s name, address, main base of operations abroad and in the Dominican Republic, fax number, email addresses and website information;
2. map with the routes authorised by the JAC, indicating the destination and alternative airports in the Dominican Republic (in digital format);
3. name, telephone number, fax, email and address of the maintenance director, chief pilot and quality control director, or equivalent officers;
4. name, telephone, number, fax, email and address of the legal representative in the Dominican Republic;
5. name, telephone number, fax, email and address of the executive technical staff in the Dominican Republic;
6. copy of the air operator’s certificate;
7. copy of the operation permit issued by the JAC;
8. copy of the maintenance and ticket-counter service agreement with the provider in the Dominican Republic, if applicable, and civil liability insurance;
9. name, telephone number, fax, email and address of the chief operations inspector and chief maintenance inspector from the country of origin of the air carrier;
10. runway analysis of the destination and alternative airports in the Dominican Republic (in digital format);
11. copy of the operations specifications issued by the relevant civil aviation authorities of the country where the foreign air carrier is established (in both paper and digital format);
12. maintenance control manual, approved by the authorities of registration of the aircraft (in digital format);
13. copy of the maintenance manual and maintenance programme for each type of aircraft (in digital format);
14. copy of operations manual indicating the sections that have been approved by the country of origin (in digital format);
15. registration certificates of all the authorised aircraft;
16. configuration of the aircraft: number of passengers, cargo capacity, maximum take-off weight and proof of compliance with the traffic collision avoidance system; make, model, registration number, serial number, navigation equipment (in digital format); and
17. minimum equipment lists, approved by authorities of registration of the aircraft.

The IDAC approval takes approximately 40 working days from the filing of all the aforementioned documents.