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Money Laundering Guidelines Revised to Combat Growing Threat

A revised set of guidelines aimed at preventing money laundering has been put in place by the government, following amendments to Act No. 8 of 2011 and the introduction of new measures to combat the growing threat.

What is Money Laundering?

Money laundering is the process by which criminals channel the benefits of illegal activities through financial transactions and institutions to conceal their true origin and ownership. This allows them to mask the derivation of assets, making it appear as though they originated from legitimate sources.

Revised Guidelines

The revised guidelines apply to “Financial Services Providers” who offer a range of services, including:

• Banking
• Venture capital
• Money transmission
• Trading in financial instruments

These providers must exercise care and diligence when assessing whether or not the guidelines apply to their business activities.

Relevant Financial Transactions

The guidelines also define “Relevant Financial Transactions,” which include any arrangement between two or more parties that involves the provision of these services. Additionally, the guidelines apply to the formation of a “business relationship” that is designed to facilitate frequent, habitual, or regular transactions between parties.

Increased Sophistication in Money Laundering Methods

Criminals are increasingly using complex and sophisticated methods to launder money, often utilizing structures with legitimate businesses or sham corporations. This has led to a growing need for Financial Services Providers to be vigilant in their efforts to prevent money laundering.

Stages of Money Laundering

The guidelines outline three stages of money laundering:

• Placement: Conversion of cash proceeds from crime into another form, such as deposits or investments.
• Layering: Creating complex layers of financial transactions designed to mask the origin of the funds.
• Integration: Placing the laundered proceeds back into the economy, making them appear legitimate.

Public Urged to Be Cautious

The public is also being urged to be cautious when engaging in financial transactions. Retail schemes that direct cash payments to investments make consumers particularly vulnerable to money laundering. Financial institutions and offshore businesses that accept cash are at risk of being involved in money laundering activities.

Legislative Framework

The Money Laundering Prevention Act, No. 8 of 2011, and the Proceeds of Crime Act, No. 4 of 1993, provide the legislative framework for combating money laundering in Dominica. The revised guidelines are designed to work within this framework, providing a comprehensive approach to preventing money laundering.

For more information on the revised guidelines and the legislation governing money laundering in Dominica, please see Appendix 1.