Financial Crime World

Dominica’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Framework: Assessment Report

Executive Summary

Dominica’s AML/CTF framework has been assessed to identify areas of improvement. The report highlights key findings, including a moderate to high risk profile for money laundering, ineffective enforcement practices, and vulnerabilities in terrorist financing.

Risk Profile

Dominica’s Risk Profile

  • Moderate to High Risk: Due to its strategic location and financial system, Dominica has a moderate to high risk profile for money laundering.
  • Inaccurate National Risk Assessment (NRA): The NRA deemed the risk of ML as “low,” which does not accurately reflect the country’s risk profile.

Bullet Points:

  • High volume of cash transactions
  • Limited international cooperation
  • Lack of transparency in beneficial ownership

Enforcement Practices

Investigation and Prosecution

  • Reactive Approach: Dominica takes a reactive approach to identifying ML cases, rather than proactive measures.
  • Insufficient Investigations: There have been instances of ML investigations and prosecutions, but they are not commensurate with Dominica’s risk profile.

Bullet Points:

  • Limited resources for AML enforcement
  • Lack of coordination between law enforcement agencies
  • Inadequate training for AML investigators

Confiscation of Proceeds

  • Sound Legal Framework: Dominica has a sound legal framework for freezing, seizing, and confiscating proceeds of crimes.

Effectiveness

  • Low Proportion of Confiscations: The proportion of non-declared or falsely declared cash or bulk transactions that are confiscated is low.

Terrorist Financing (TF)

  • Strong Legal Framework: Dominica has a strong legal framework for criminalizing TF.

Vulnerabilities

  • NRA Did Not Consider Several TF Vulnerabilities
  • No Prosecutions: The country has not prosecuted any cases related to TF in the period under review.
  • Limited Investigations: Authorities have investigated seven TF cases, with six closed and one considered for ML prosecution.

Terrorist Financing Sanctions (TFS)

  • Updated Legal Framework: Dominica has updated its legal framework required by UNSCR 1267 and 1373.

Central Authority Procedures

  • Deficient Freeze Without Delay Mechanism
  • Inaccurate Distinguishing Between UNSCR Resolutions

Recommendations

  1. Improve NRA: Improve the National Risk Assessment to reflect a more accurate risk profile for ML and TF.
  2. Enhance Proactive Measures: Enhance proactive measures for identifying and investigating ML cases.
  3. Strengthen Confiscation System: Strengthen the confiscation system by increasing the proportion of non-declared or falsely declared cash or bulk transactions that are confiscated.
  4. Conduct Sector Review: Conduct a comprehensive sector review of NPOs (non-profit organizations) to inform the country’s assessment of TF risk.
  5. Provide Training: Provide specific training for the FSU on TF risks and vulnerabilities in NPOs.

These recommendations aim to strengthen Dominica’s AML/CTF framework, improve its risk profile, and enhance enforcement practices to prevent money laundering and terrorist financing.