Financial Crime World

Comprehensive Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Guide for Dominica

Introduction

The Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guide provides a comprehensive overview of the scope, guidelines, and legislation related to preventing money laundering in the jurisdiction of Dominica.

Key Definitions and Concepts

Definition of Money Laundering

Money laundering is defined as “the process of disguising or concealing the true origin of funds obtained through criminal activity.”

Layers of Money Laundering

There are three main stages in the money laundering process:

  • Placement: The initial stage where criminal proceeds are introduced into the financial system.
  • Layering: The second stage where the proceeds are transferred and transformed to disguise their origin.
  • Integration: The final stage where the laundered funds are integrated into the legitimate economy.

Preventing Money Laundering

The guide emphasizes the importance of legitimate business funds, such as:

  • Realizing property or business assets
  • Reducing shares
  • Switching between investment forms
  • Surrendering paid-up insurance policies

Risk of Cash-Based Transactions

Retail schemes involving cash transactions make the public vulnerable to money laundering. Offshore businesses accepting cash are particularly at risk.

Scope of the Guidelines

The guide applies to “Financial Services Providers” who offer services such as:

  • Banking
  • Financial business
  • Venture capital
  • Money transmission services
  • Issuing means of payment
  • Guarantees and commitments
  • Trading in financial instruments

Business Relationship

The guidelines apply to a Relevant Financial Transaction involving an arrangement between parties when at least one party is acting in the course of business or forming a “business relationship” for frequent or habitual transactions.

Reporting Suspicious Activity

The guide stresses the importance of reporting suspicious activity and verifying identity if money laundering is suspected, in accordance with Section IX of the guide.

Legislation

The guide references the Money Laundering Prevention Act (No 8 of 2011) and the Proceeds of Crime Act (No 4 of 1993) for definitions and offenses related to money laundering.

This comprehensive guide serves as a valuable resource for financial institutions, businesses, and individuals in Dominica to understand and comply with anti-money laundering regulations.