Preventing Money Laundering in Dominica: Key Regulations

The government of Dominica has implemented a set of regulations aimed at preventing money laundering by setting standards for financial institutions, relevant businesses, and other entities involved in financial transactions. Here’s an overview of the key points:

Defining Relevant Businesses

A “relevant business” is defined as any business that provides financial services, including:

• Banks
• Insurance companies
• Securities firms
• Money transfer operators

Customer Due Diligence

Financial institutions must conduct customer due diligence on all new customers, which includes verifying the identity of beneficial owners of legal persons and entities.

Identity Verification Methods

The regulations specify methods for verifying a person’s identity, including:

• Checking their passport or national ID card
• Requiring them to provide proof of address
• Using electronic means such as sending a payment to verify an account holder’s identity

Transactions on Behalf of Another

When a customer is acting on behalf of another person or entity, the financial institution must establish the true identity of that other person or entity.

Exemptions from Customer Due Diligence

There are exemptions for certain types of transactions and customers, such as:

• Life insurance policies with premiums under a certain threshold
• Businesses licensed and supervised by the Authority

Politically Exposed Persons (PEPs)

Financial institutions must put in place risk management systems to identify PEPs and take enhanced measures when dealing with them, including verifying their identity, source of funds, and conducting regular monitoring.

Cross-Border Correspondent Banking

Banks must adequately identify and verify respondent institutions, gather information about the nature of their business, assess their anti-money laundering controls, and determine if they have been subject to a money laundering investigation or regulatory action.

Reporting Suspicious Transactions

Financial institutions are required to report suspicious transactions to the Authority.

Record Keeping

All relevant records must be kept for at least five years from the end of the business relationship or transaction.

Training and Awareness

Employees of relevant businesses must receive training on anti-money laundering principles, procedures, and controls.

Penalties for Non-Compliance

Failure to comply with these regulations may result in penalties, including fines and legal action.