Financial Crime World

Title: Dominica’s Financial Crime Reporting Requirements: A Closer Look at the Anti-Money Laundering Code of Practice

Overview

The Commonwealth of Dominica has enacted rigorous measures to combat financial crimes through the Proceeds of Crime (Suspicious Transactions and Reports) Regulations S.R.O. 10. This regulation outlines the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Code of Practice. This article explores the key aspects of this code, which applies to every entity and professional in Dominica.

Objectives of the Code

The primary objectives of the code are to:

  • Detect and prevent money laundering and terrorist financing.
  • Ensure all Dominican entities and professionals comply with the Proceeds of Crime Act, the Financial Intelligence Unit Act, Money Laundering Prevention Act, and the Suppression of the Financing of Terrorism Act.

Role of the Financial Intelligence Unit (FIU)

The Financial Intelligence Unit (FIU) is the reporting authority for suspicious transactions. Upon receiving a report, the FIU:

  1. Acknowledges receipt in writing.
  2. Assigns it to an investigating officer.
  3. Conducts discreet inquiries to ascertain the basis for the suspicion while maintaining confidentiality.

Internal Control Systems

Entities and professionals must establish internal control systems, which include:

  • Written policies, processes, and procedures.
  • Effective risk assessments.
  • Designation of individuals responsible for managing AML/CFT compliance.
  • Implementation of anti-money laundering and terrorist financing compliance functions.

Compliance Monitoring by the Financial Services Unit (FSU)

The FSU is responsible for monitoring compliance with the code and other relevant legislation. Their duties include:

  • On-site and off-site inspections.
  • Assessment of internal procedures and risk management policies.
  • Reporting identified weaknesses and recommending remedial actions.
  • Imposing penalties for non-compliance.

Training

Training is a vital component of the code. The FSU is expected to:

  • Develop a system of education for practitioners.
  • Train inspecting staff to assess the quality of internal procedures, customer risk assessments, and junior staff level of understanding.

Customer Due Diligence Measures

Entities and professionals must adhere to customer due diligence measures, which include:

  • Establishing customer identity.
  • Verifying sources of funds.
  • Maintaining records for a minimum retention period.
  • Adhering to verification requirements for politically exposed persons, trusts, shell banks, correspondent banking relationships, wire transfers, and non-face-to-face business relationships.