Financial Crime World

Dominica’s Compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Regulations

Introduction

The purpose of this report is to assess Dominica’s compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. This assessment highlights the country’s strengths and weaknesses in implementing AML and CTF frameworks.

Money Laundering (ML)

  • Dominica has a sound legal framework for AML, but its implementation is not sufficient to address higher-risk areas identified in the National Risk Assessment (NRA).

Enforcement

  • The Financial Investigation Unit (FIU) conducts strategic analysis, but it does not adequately reflect all high-risk areas.
  • Dominica takes a reactive approach to identifying ML and lacks effective detection of complex ML cases involving professional networks and cash smuggling.

Terrorist Financing (TF)

  • Dominica has a strong legal framework for criminalizing TF, but its NRA did not consider several vulnerabilities, including cross-border wire transfers, non-profit organizations (NPOs), and virtual asset service providers (VASPs).

Enforcement

  • Authorities have not prosecuted any TF cases in the period under review, although seven cases were investigated, with six being closed.
  • The country lacks a national CFT policy to continuously assess the TF threat, identify training requirements for law enforcement agencies, and develop policies aligned with this national strategy.

Terrorist Financing Sanctions (TFS)

  • Dominica has updated its legal framework required by United Nations Security Council Resolution 1267 and 1373 but lacks a functioning freeze without delay mechanism.

Enforcement

  • The Financial Supervisory Unit (FSU) has provided training to regulated entities on TFS requirements, but no guidance has been issued to financial institutions or designated non-financial businesses and professions (DNFBPs) on their obligations.

General Observations

  • Dominica’s AML and CTF frameworks are generally in place, but their implementation is lacking in several areas.
  • The country requires improvement in identifying and addressing higher-risk areas, including professional networks and complex ML cases.
  • TF vulnerabilities were not adequately addressed in the NRA, and a comprehensive sector review of NPOs has not been conducted to inform the country’s assessment of TF risk.

Conclusion

Overall, while Dominica has made progress in establishing AML and CTF frameworks, its implementation is incomplete, and significant work remains to be done to effectively address ML and TF risks.