Dominica’s Digital Payments Face Anti-Money Laundering and Combating Terrorism Risks, Experts Warn

ECCB Recommended to Take Over AML/CFT Supervision

The Monetary Council has recommended that the Eastern Caribbean Central Bank (ECCB) take over the supervision and regulation of anti-money laundering and combating terrorism (AML/CFT) for financial institutions licensed under the Banking Act in Dominica. This move comes as a response to deficiencies cited in the Caribbean Financial Action Task Force Mutual Evaluation Reports.

ECCB’s Risk-Based Framework Approach

The ECCB, which is responsible for AML/CFT/CPF supervision for LFIs in Antigua and Barbuda, Dominica, Grenada, Saint Lucia, and St Vincent and the Grenadines, has adopted a risk-based framework approach to ensure effective supervision. The revised AML/CFT/CPF Supervision Framework includes:

• Implementation of new measures such as:
  • AML/CFT legislation
  • Multi-lateral Memorandum of Understanding (MMoU)
  • AML/CFT/CPF Risk-Based Onsite Examination Manual
  • Money laundering, terrorist and proliferation financing (ML/TF/PF) Prudential Return
  • ML/TF/PF Risk Assessment Tool
• Partnership with key stakeholders to ensure ongoing training on emerging issues

Increasing Use of Digital Payments Posing AML/CFT Risks

Experts warn that the increasing use of digital payments in Dominica poses significant AML/CFT risks. The lack of transparency and accountability in these transactions makes it easier for criminals to launder money and finance terrorism.

ECCB Must Take Proactive Approach

The ECCB must take a proactive approach to mitigate these risks by implementing robust measures to monitor and regulate digital payment systems.

Risk-Based Framework Design

The ECCB’s risk-based framework is designed to identify and assess the level of risk posed by each financial institution, allowing for targeted supervision and regulation. This approach will help to ensure that AML/CFT regulations are effective in preventing money laundering and combating terrorism.

Experts Caution More Needs to be Done

However, experts caution that more needs to be done to address the growing AML/CFT risks posed by digital payments. The ECCB must work closely with key stakeholders, including financial institutions, to implement robust measures to prevent money laundering and financing of terrorism. Failure to do so could have serious consequences for Dominica’s economy and national security.

Conclusion

As the use of digital payments continues to grow in Dominica, it is crucial that the ECCB remains vigilant in its efforts to mitigate AML/CFT risks. The implementation of a robust risk-based framework will help to ensure that these transactions are transparent, accountable, and secure, reducing the risk of money laundering and financing of terrorism.