Financial Crime World

Compliance with AML-KYC Regulations in Dominica: An Overview of Identity Verification Requirements

Dominica, a beautiful Caribbean nation, has enacted stringent measures to combat money laundering and terrorist financing through its Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. In this article, we provide an overview of the identity verification requirements as outlined in the Dominica AML-KYC Regulations for financial institutions operating in the country.

Key Provisions

These regulations establish the rights and obligations of legal and natural persons in preventing and detecting money laundering and terrorist financing. Key provisions include:

  • Customer screening
  • Identification
  • Verification

Scope

This report serves as a useful reference for financial institutions seeking to understand the identity verification procedures required under Dominica’s Money Laundering (Prevention) Act and related regulations.

Definitions

For clarity, the following terms are used in this article:

  • Client: Shufti Pro’s customer.
  • Customer: The client’s customer subject to AML-KYC checks.
  • End-user: The client’s customer from Shufti Pro’s perspective.
  • Document Verification: The process of confirming the authenticity of a government-issued identity document.
  • Identity Verification: The process of confirming a customer’s identity.
  • Proof of Identity: A valid government-issued identity document used to identify an individual.
  • Enhanced Due Diligence (EDD): A more extensive scrutiny of potential business relationships.
  • Third-Party Diligence: Outsourcing due diligence processes to an external party.
  • Politically Exposed Person (PEP): An individual with a higher risk of involvement in bribery and corruption.
  • Due Diligence: The measures taken to mitigate risks before entering into an agreement or conducting a financial transaction.

Identity Verification Requirements

As per the Dominica AML-KYC regulations, the following identity attributes are required to identify a natural person from official documents:

  • Name
  • Address
  • Identity document number

Compliant CDD Methods

To verify an individual’s identity, Shufti Pro may use various methods, such as:

  • Document Verification using independent sourced documents
  • Biometric identification documents

Our services include specialized Document Verification to check the authenticity of presented documents, including checks for security features, document expiration, holograms, and more.

Required Documents for Verification

In Dominica, accepted documents as proof of identity include:

  • Social Security Cards
  • Passports
  • Other valid photo identification documents

Address verification can be accomplished using:

  • Current utility bills
  • Government-issued documents
  • Bank statements

Timing of Verification

Identity verification is not a one-time process but instead requires multiple instances, depending on the specific requirements and your convenience. Appropriate timing includes:

  • Onboarding new customers
  • Handling transaction data
  • When facing higher risks from customers

Politically Exposed Persons (PEPs) and EDD Measures

Under Dominica’s enhanced due diligence regulations, it is crucial to identify customers deemed Politically Exposed Persons (PEPs) or those holding public office. Shufti Pro offers an AML Screening service to help financial institutions determine if a potential customer falls under these categories and adjust the level of risk assessment accordingly.

Importance of External Services for Compliance

Dominican regulations allow the use of third-party services to apply measures of due diligence. However, the ultimate responsibility for maintaining compliance and fulfilling AML and KYC obligations lies with the financial institution. Shufti Pro can act as an external third-party service provider, providing document verification, sanctions screening, and enhanced due diligence services to help your institution stay compliant.

Record Retention

Finally, Dominican regulations require record retention for seven years as part of the due diligence obligations for financial institutions. If this data is processed, collected, and managed by a third-party service provider, the institution remains responsible for collecting all necessary information without undue delay.