Financial Crime World

Financial Action Task Force (FATF) Assessment of Dominica’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures

Overview

The Financial Action Task Force (FATF) has conducted an assessment of Dominica’s anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. This report highlights key findings, areas for improvement, and recommendations for enhancing Dominica’s AML/CFT framework.

Anti-Money Laundering (AML)

Strategic Analysis

  • The Financial Intelligence Unit (FIU) in Dominica conducts strategic analysis, but it does not sufficiently reflect all higher-risk areas identified in the National Risk Assessment (NRA).
  • This indicates a need for more comprehensive and proactive identification of money laundering risks.

Investigations and Prosecutions

  • While Dominica has demonstrated instances of money laundering investigations and prosecutions, the extent is not fully commensurate with its risk profile.
  • A more proactive approach to identifying and investigating money laundering cases is necessary.

Confiscation Measures

  • The confiscation of criminal proceeds is pursued as a policy objective in Dominica.
  • Alternative measures, such as confiscation of cash, are used extensively.

Confiscation

  • There is a sound legal framework on freezing, seizing, and confiscating instrumentalities and proceeds of crimes.
  • This demonstrates a strong foundation for combating money laundering.

Enforcement Challenges

  • The declaration system for cross-border movements of cash or bulk cash-intensive (BCI) transactions is not being effectively enforced.
  • Improved enforcement mechanisms are necessary to prevent money laundering through cross-border transactions.

Terrorist Financing (TF)

  • Dominica has a strong legal framework for criminalizing TF.
  • This demonstrates a commitment to preventing the financing of terrorism.

Vulnerabilities

  • The NRA did not consider several TF vulnerabilities, including cross-border wire transfers, non-profit organizations (NPOs), and virtual asset service providers (VASPs).
  • Enhanced risk assessments are necessary to address these vulnerabilities.

Prosecutions

  • Authorities in Dominica have not prosecuted any cases related to TF in the period under review.
  • A lack of prosecutions indicates a need for more effective investigation and prosecution of TF cases.

Terrorist Financing Sanctions (TFS-TF)

  • Dominica has updated its legal framework required by UNSCR 1267 and 1373, but the Central Authority procedures do not accurately distinguish between requirements under the two resolutions.
  • Improved clarity in regulatory procedures is necessary to ensure effective implementation of TF sanctions.

Freeze without Delay Mechanism

  • The freeze without delay mechanism is also deficient.
  • Enhanced mechanisms are necessary to prevent the financing of terrorism through the rapid freezing of assets.

Conclusion

While Dominica has made progress in implementing AML/CFT measures, there are still areas for improvement, particularly in addressing TF vulnerabilities and implementing effective TFS-TF mechanisms. Recommendations include enhanced risk assessments, improved enforcement mechanisms, and increased awareness among regulated entities to ensure a robust AML/CFT framework.