Dominican Republic Faces Challenges in Banking Regulation Compliance

Overview

The Dominican Republic has made significant progress in implementing banking regulation compliance measures, but still faces challenges in certain areas. A recent report by the Financial Action Task Force (FATF) assessed the country’s level of implementation of international standards for combating money laundering and terrorist financing.

Progress Made

According to the FATF report, the Dominican Republic received ratings of “compliant” or “largely compliant” in several key areas, including:

• National Cooperation and Coordination: The country has made significant progress in strengthening national cooperation and coordination among government agencies and financial institutions.
• Confiscation and Provisional Measures: The Dominican Republic has implemented effective measures for confiscating and freezing assets related to money laundering and terrorist financing.
• Customer Due Diligence: The country’s rules on customer due diligence are largely compliant with international standards.

Areas for Improvement

However, the FATF report identified some areas where the country is “partially compliant” or “non-compliant”, including:

Non-Profit Organizations

• The Dominican Republic’s rules on customer due diligence for non-profit organizations are not sufficient.
• There is a lack of effective oversight in this area.

Financial Institution Secrecy Laws

• The country’s laws on financial institution secrecy do not provide adequate protection against money laundering and terrorist financing.

Internal Controls

• The Dominican Republic’s financial institutions need to improve their internal controls to prevent money laundering and terrorist financing.

Recommendations for Improvement

The FATF report made several recommendations for improvement, including:

• Strengthening Rules on Customer Due Diligence: The country should strengthen its rules on customer due diligence for non-profit organizations.
• Revising Laws on Financial Institution Secrecy: The Dominican Republic should revise its laws on financial institution secrecy to provide adequate protection against money laundering and terrorist financing.
• Improving Internal Controls: The country’s financial institutions need to improve their internal controls to prevent money laundering and terrorist financing.

Next Steps

The Dominican Republic has committed to implementing the recommendations made by the FATF report. The country will need to take concrete steps to strengthen its banking regulation compliance measures, including:

• Revising laws and regulations
• Improving oversight
• Enhancing internal controls in financial institutions