Financial Crime World

AML/CTF Regulations in the Dominican Republic: Combating Money Laundering and Terrorism Financing

The government of the Dominican Republic has taken a proactive approach to combating money laundering and terrorism financing by establishing the Committee against Money Laundering and Terrorism Financing, a collegiate body responsible for preventing, detecting, controlling, and combatting these financial crimes.

Composition of the Committee

  • The committee is comprised of several governmental agencies deemed competent authorities, including:
    • Public Ministry
    • Financial Analysis Unit (UAF)
    • National Directorate for Drug Control
    • Monetary Board
    • General Directorate of Internal Taxes
    • General Directorate of Customs
    • Directorate of Casinos and Gaming
    • Cooperative Development and Credit Institute
    • Superintendents of Insurance, Banks, Securities, Pension Fund, and Private Security

Role of the Financial Analysis Unit (UAF)

  • The UAF, attached to the Ministry of Finance, serves as an autonomous entity that provides technical support to the National Committee against Money Laundering and Terrorism Financing.
  • Its primary responsibility is to:
    • Analyze financial transactions
    • Identify possible infractions of money laundering and terrorism financing
    • Submit financial analysis reports to the Public Ministry regarding these infractions

AML/CTF Regulations for Regulated Parties

To comply with AML/CTF regulations in the Dominican Republic, all regulated parties must adopt a risk-based approach to developing and implementing their compliance programs. This includes:

  • Evaluating money laundering and terrorist financing risks
  • Having the capability to manage and mitigate risk
  • Conducting client due diligence or enhanced due diligence
  • Continuing to monitor transactions
  • Maintaining transaction registries
  • Designating a compliance officer with specific functions and responsibilities
  • Reporting unusual transactions to the UAF
  • Ensuring training, robust policies, procedures, and controls

Suspicious Operations Reporting

Regulated entities must report suspicious operations to the UAF within five business days of the transaction occurring or being attempted. Suspicious operations are defined as:

  • Complex, unusual, significant, or periodic transactions that do not have an obvious economic or legal basis
  • Transactions that generate suspicion of being involved in money laundering, a preceding offense, or terrorism financing

Guide for Obligated Subjects

The UAF has published a guide to help entities categorize and identify suspicious activities. Each regulatory sector also establishes assumptions indicative of characteristics of transactions or operations that can be considered suspicious.

Developing a Compliance Program

For regulated entities without an existing compliance program, developing one is essential to ensure compliance with AML/CTF regulations in the Dominican Republic. The program should include:

  • Policies and procedures that address risk assessment
  • Client due diligence
  • Transaction monitoring
  • Reporting suspicious activities

Existing programs must also be reviewed to ensure they comply with the requirements outlined above.

Conclusion

By implementing robust AML/CTF regulations and compliance programs, the Dominican Republic is taking a proactive approach to preventing and combating money laundering and terrorism financing, ensuring a safer financial environment for its citizens and businesses.