Title: Dominica’s Financial Crime Risk Assessment: A Look at Its Compliance with FATF Recommendations
Background
Dominica, a beautiful Caribbean nation known for its tourism industry, underwent a Mutual Evaluation assessment in 2023 by the Financial Action Task Force (FATF) to determine its level of compliance with the international organization’s Recommendations. FATF provides a standard framework for combating Money Laundering (ML) and Terrorist Financing (TF).
Assessment Results
The results of this assessment are classified into the following ratings:
- Compliant (C)
- Largely Compliant (LC)
- Partially Compliant (PC)
- Non-Compliant (NC)
Performance across Various Recommendations
Money Laundering (ML) Recommendations
The following is a breakdown of Dominica’s performance across various ML Recommendations:
| Recommendation | Rating |
|---|---|
| R.1 - Assessing risk & applying risk-based approach | Largely Compliant (LC) |
| R.2 - National cooperation and coordination | Largely Compliant (LC) |
| R.3 - Money laundering offence | Compliant (C) |
| R.4 - Confiscation and provisional measures | Compliant (C) |
| R.5 - Terrorist financing offence | Compliant (C) |
| R.6 - Targeted financial sanctions related to terrorism & terrorist financing | Partially Compliant (PC) |
| R.7 - Targeted financial sanctions related to proliferation | Non-Compliant (NC) |
Other Recommendations
| Recommendation | Rating |
|---|---|
| R.8 - Non-profit organizations | Partially Compliant (PC) |
| R.9 - Financial institution secrecy laws | Compliant (C) |
| R.10 - Customer due diligence | Largely Compliant (LC) |
| R.11 - Record keeping | Compliant (C) |
| R.12 - Politically exposed persons | Largely Compliant (LC) |
| R.13 - Correspondent banking | Compliant (C) |
| R.14 - Money or value transfer services | Largely Compliant (LC) |
| R.15 - New technologies | Partially Compliant (PC) |
| R.16 - Wire transfers | Largely Compliant (LC) |
| R.17 - Reliance on third parties | Compliant (C) |
| R.18 - Internal controls and foreign branches and subsidiaries | Compliant (C) |
| R.19 - Higher-risk countries | Largely Compliant (LC) |
| R.20 - Reporting of suspicious transactions | Compliant (C) |
| R.21 - Tipping-off and confidentiality | Compliant (C) |
| R.22 - Designated non-financial businesses and professions (DNFBPs) - Customer due diligence | Partially Compliant (PC) |
| R.23 - DNFBPs - Other measures | Large Compliant (LC) |
| R.24 - Transparency and beneficial ownership of legal persons | Partially Compliant (PC) |
| R.25 - Transparency and beneficial ownership of legal arrangements | Large Compliant (LC) |
| R.26 - Regulation and supervision of financial institutions | Large Compliant (LC) |
| R.27 - Powers of supervisors | Large Compliant (LC) |
| R.28 - Regulation and supervision of DNFBPs | Partially Compliant (PC) |
| R.29 - Financial intelligence units | Compliant (C) |
| R.30 - Responsibilities of law enforcement and investigative authorities | Compliant (C) |
| R.31 - Powers of law enforcement and investigative authorities | Large Compliant (LC) |
| R.32 - Cash couriers | Large Compliant (LC) |
| R.33 - Statistics | Large Compliant (LC) |
| R.34 - Guidance and feedback | Compliant (C) |
| R.35 - Sanctions | Large Compliant (LC) |
| R.37 - Mutual legal assistance | Large Compliant (LC) |
| R.38 - Mutual legal assistance: freezing and confiscation | Compliant (C) |
| R.39 - Extradition | Non-Compliant (NC) |
| R.40 - Other forms of international cooperation | Large Compliant (LC) |
Areas for Improvement
Although Dominica shows progress in several areas of the FATF Recommendations, improvements are required, particularly in:
- Financial institution secrecy laws (R.9)
- Targeted financial sanctions (R.6, R.7, and R.36)
- Beneficial ownership transparency (R.24, and R.25)
- International cooperation (R.39)