Financial Crime World

Dominica Fails to Meet FATF Recommendations on Financial Crime Risk Assessment

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Dominica, a popular tourist destination in the Caribbean, has failed to meet international standards for combating money laundering and terrorist financing according to a recent Mutual Evaluation assessment by the Financial Action Task Force (FATF).

Improvement in Some Areas

The evaluation, conducted in 2023, categorized Dominica’s performance across various FATF Recommendations into four ratings: Compliant (C), Largely Compliant (LC), Partially Compliant (PC), and Non-Compliant (NC). While the country showed improvement in several areas, including national cooperation and coordination efforts, it still has significant gaps to fill.

Areas of Improvement

  • Money laundering offences
  • Confiscation measures
  • Targeted financial sanctions

Shortcomings Identified

However, Dominica failed to meet international standards in several critical areas:

Financial Institution Secrecy Laws

  • The country’s laws do not provide adequate transparency and oversight for financial institutions.
  • Beneficial ownership transparency is lacking.

Targeted Financial Sanctions

  • Dominica lacks effective mechanisms for imposing targeted financial sanctions on individuals and entities involved in terrorist financing or money laundering activities.

Prevention of Terrorist Financing

  • The country was deemed non-compliant with recommendations related to proliferation and extradition.

Recommendations for Improvement

To address these shortcomings, Dominica is urged to:

Strengthen Financial Regulations

  • Improve transparency and accountability in financial institutions.
  • Enhance international cooperation to combat money laundering and terrorist financing.

Implement Targeted Financial Sanctions

  • Take concrete steps to impose targeted financial sanctions on individuals and entities involved in terrorist financing or money laundering activities.

Ensure Beneficial Ownership Transparency

  • Make beneficial ownership information of legal persons and arrangements publicly available.

Conclusion

The FATF’s evaluation highlights the need for Dominica to prioritize risk assessment in financial crime, particularly given its reputation as a popular tourist destination and potential vulnerability to money laundering and terrorist financing activities. It remains to be seen whether Dominica will take concrete steps to address the identified shortcomings and improve its compliance with international standards.