Financial Crime World

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations in the Dominican Republic

The Dominican Republic has implemented regulations to prevent and combat money laundering and terrorist financing. The following are key points regarding these regulations:

Definition of Regulated Entities

  • Financial Institutions: Financial institutions, non-financial regulated entities, and individuals involved in money laundering or terrorist activities are subject to the regulations.
  • Non-Financial Regulated Entities: Non-financial regulated entities must also comply with AML/CFT regulations.

Compliance Programmes

  • Unified Compliance Programme: Financial groups and economic clusters must have a unified compliance programme that includes:
    • Policies
    • Procedures
    • Risk assessment
    • Disciplinary sanctions
    • Codes of ethics
    • External audits
    • Due diligence
    • Monitoring and mitigation strategies

Risk Factors or Variables

  • Identify, Control, Mitigate, and Monitor: Regulated entities must identify, control, mitigate, and monitor potential AML/CFT risk events considering clients, products/services, geographic areas, and distribution channels.

Record Keeping

  • Retention of Records: Regulated entities are required to keep records of transactions, due diligence measures, account files, commercial correspondence, and analysis outcomes for at least 10 years after the commercial relationship ends or the one-off transaction date.

Compliance Officer

  • Appointment of a Compliance Officer: Each regulated entity must appoint a Compliance Officer with senior position and technical skills to supervise compliance programmes and liaise with the FAU and supervisory bodies.

Administrative Sanctions

  • Liability for Non-Compliance: Regulated entities, public officers, employees, and individuals in positions of administration or leadership are liable for administrative sanctions if they do not comply with regulations.
  • Fines Ranging from DOP5,001,000 to DOP10,000,000: Financial regulated entities face fines ranging from DOP5,001,000 to DOP10,000,000 for very serious offenses.
  • Fines Between DOP2,000,001 and DOP4,000,000: Non-financial regulated entities face fines between DOP2,000,001 and DOP4,000,000.

Precautionary Freezing of Assets

  • Freezing Assets: Regulated entities must freeze assets if a client or real beneficiary appears on United Nations Security Council lists; failure to do so is considered a very serious administrative breach.
  • Precautionary Measures: This measure aims to prevent the misuse of financial resources for illicit purposes.

Institutional Organisation

  • Anti-Money Laundering & Financing of Terrorism Committee: The Government of the Dominican Republic has an Anti-Money Laundering & Financing of Terrorism committee, which includes representatives from various ministries and departments, with the FAU acting as technical secretary.
  • Coordination and Supervision: This committee is responsible for coordinating efforts to prevent and combat money laundering and terrorist financing in the country.

These regulations are designed to ensure that regulated entities have robust compliance programmes, record-keeping systems, and procedures for identifying and mitigating AML/CFT risks. By implementing these measures, the Dominican Republic aims to prevent and combat money laundering and terrorist financing effectively.