Financial Crime World

Customs and DFIU Share Information on a Case-by-Case Basis: Concerns Raised Over Anti-Money Laundering Measures in the Country

Introduction

A recent report has highlighted that the Customs department and the Dominican Financial Intelligence Unit (DFIU) share information on a case-by-case basis, with minimal records being maintained for statistical or audit purposes. This lack of transparency has raised concerns about the effectiveness of anti-money laundering (AML) measures in the country.

Creation of Memorandum of Understanding

Efforts are underway to create a Memorandum of Understanding (MOU) between Customs, the DFIU, and law enforcement agencies to improve cooperation on matters related to money laundering and financing of terrorism. However, the report notes that this MOU has yet to be implemented.

Benefits of an MOU

The implementation of an MOU would:

  • Enhance cooperation among law enforcement agencies
  • Improve information sharing for effective AML/CFT measures
  • Strengthen the country’s efforts in combating money laundering and financing of terrorism

Legislation and Declaration Requirements

Since 2009, the country has introduced new legislation and inwards passenger declaration requirements. However, Customs still needs to meet the requirements set out in the Combating Drug Abuse Act (CDA). The report recommends that the current declaration requirements include outward declarations and currency sent through mail and containerized cargo.

Declaration Requirements

The report suggests that:

  • Outward declarations should be included to track money laundering activities
  • Currency sent through mail and containerized cargo should be subject to declaration requirements

The country has regulations in place for legal persons under the Business Corporations Act, Revised Partnership Act, Limited Partnership Act, and Limited Liability Company Act. However, there is a lack of transparency regarding beneficial ownership information, with no mandatory disclosure requirements and no measures to prevent misuse of bearer shares.

Concerns Over Transparency

The report highlights concerns that:

  • The lack of transparency hinders effective AML/CFT measures
  • Beneficial ownership information should be disclosed to prevent money laundering activities

Trusts and Non-Profit Organizations

The formation of trusts in the country is governed by the Trust Act and the Trust Companies Act. While there may be no existing trusts in the country, the law on trusts remains valid and unutilized. The non-profit organization (NPO) sector is primarily governed by the Non-Profit Corporations Act, Cooperatives Act, and Counter Terrorism Act.

Regulation of NPOs

The report recommends that:

  • NPOs should be subject to stricter regulations and monitoring to prevent money laundering activities

Preventive Measures

The country has comprehensive AML/CFT preventive measures in place for the financial sector through legislation and regulations. However, there are concerns about the effectiveness of these measures due to the lack of transparency and minimal supervision of the sector.

Challenges Faced

The report highlights that:

  • The lack of transparency and minimal supervision hinder effective AML/CFT measures
  • The country needs to strengthen its AML/CFT framework to combat money laundering and financing of terrorism