Financial Crime World

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Dominica’s Anti-Money Laundering and Combating Terrorist Financing Framework: An Assessment

The International Monetary Fund (IMF) has released a report assessing Dominica’s compliance with anti-money laundering (AML), combating terrorist financing (CFT), and proliferation financing (PF) regulations. The report is divided into 20 sections, each addressing different aspects of Dominica’s AML/CFT/PF framework.

Money Laundering: Key Findings

Dominica has a sound legal framework for AML in place. However, there are some areas that require improvement:

  • The Financial Intelligence Unit (FIU) does not conduct strategic analysis on money laundering risks.
  • Money laundering investigations are not commensurate with the country’s risk profile.
  • Alternative measures, such as confiscation of cash, are used extensively.

Terrorist Financing: Key Findings

Dominica has a strong legal framework for CFT. However, there are some vulnerabilities that need to be addressed:

  • The National Risk Assessment (NRA) did not consider several terrorist financing vulnerabilities, including cross-border wire transfers and non-profit organizations.
  • No cases have been prosecuted for terrorist financing in the period under review.

Proliferation Financing: Lack of Information

The report does not provide specific information on PF in Dominica.

Implementation of UNSCR Resolutions

Dominica has updated its legal framework required by UNSCR 1267 and 1373. However, there are some areas that require improvement:

  • The Central Authority procedures do not accurately distinguish between what is required under the two resolutions.
  • The Financial Services Unit (FSU) as primary supervisory authority has implemented training to regulated entities on terrorist financing requirements in the SFTA.

National CFT Policy: Need for Improvement

Dominica lacks a national CFT policy that would continuously assess the terrorist financing threat and identify requirements for training and professional development of competent authorities.

Recommendations for Improvement

The report highlights several areas where Dominica needs to improve its AML/CFT/PF framework, including:

  • Conducting more strategic analysis on money laundering risks.
  • Improving the effectiveness, dissuasiveness, and proportionality of sanctions for terrorist financing cases.
  • Implementing a national CFT policy.
  • Providing training on terrorist financing risks and vulnerabilities in non-profit organizations.
  • Enhancing supervision and oversight of non-profit organizations.

Conclusion

While Dominica has made progress in updating its legal framework required by UNSCR resolutions, there is still work to be done to ensure effective implementation of AML/CFT/PF regulations.