Financial Crime World

Dominica Fails to Meet Expectations in Anti-Money Laundering Efforts

A recent assessment by international authorities has revealed that Dominica’s efforts to combat money laundering (ML) and terrorist financing (TF) are lacking. Despite some progress, the country falls short of meeting its obligations under global standards.

Financial Intelligence Unit (FIU) Challenges

  • The FIU is responsible for conducting strategic analysis and disseminating information to trigger ML investigations.
  • However, the number of disseminations can be improved, and the FIU does not sufficiently reflect all higher-risk areas identified in the National Risk Assessment (NRA).

Money Laundering Investigations and Prosecutions

  • ML investigations and prosecutions in Dominica are not commensurate with its risk profile.
  • The country takes a reactive approach to identifying ML cases, which hampers successful prosecution.
  • Alternative measures, such as confiscation of cash, are used extensively, but ML cases are not prioritized within the judicial system.

Confiscation of Criminal Proceeds

  • While there is a sound legal framework in place, the declaration system for cross-border movements of cash or bulk cash transactions (BCTs) is not being effectively enforced.

Terrorist Financing Concerns

  • Dominica has a strong legal framework, but its NRA did not consider several vulnerabilities, including:
    • Cross-border wire transfers
    • Non-profit organizations (NPOs)
    • Virtual asset service providers (VASPs)
  • The country has not prosecuted any TF cases in the past period under review, and the effectiveness, dissuasiveness, and proportionality of sanctions cannot be assessed.

Financial Services Unit (FSU) Shortcomings

  • The FSU is responsible for implementing anti-money laundering and combating the financing of terrorism (AML/CFT) measures.
  • However, it lacks a national CFT policy that would continuously assess the TF threat and identify requirements for training and professional development of competent authorities.

Central Authority Procedures Deficiencies

  • Despite some progress in updating the legal framework required by United Nations Security Council Resolutions 1267 and 1373, the Central Authority procedures are deficient.
  • The freeze without delay mechanism is not functioning properly.

Recommendations for Improvement

  • Conduct a comprehensive sector review of NPOs to inform the country’s assessment of TF risk.
  • Implement targeted outreach and oversight in this sector.
  • Provide specific guidance to FIs or DNFBPs on their obligations under TFS requirements.

Conclusion

While Dominica has made some progress in implementing anti-money laundering and combating the financing of terrorism measures, it is clear that more needs to be done to meet international standards and effectively combat these threats.