Financial Crime World

Money Laundering and Terrorist Financing Assessment Report for Dominica

Executive Summary

The report provides an assessment of Dominica’s framework for combating money laundering (ML) and terrorist financing (TF). The evaluation covers various aspects, including the country’s risk profile, legislative framework, investigative and prosecutorial capabilities, and implementation of Financial Action Task Force (FATF) recommendations.

Money Laundering (ML)

Risk Profile and Legislative Framework

  • Dominica has a high risk profile for ML due to its geographic location, financial sector, and potential for cash-based transactions.
  • The country’s legislation is sound but not fully effective in combating ML.

Investigative and Prosecutorial Capabilities

  • The Financial Intelligence Unit (FIU) conducts strategic analysis but does not reflect all higher-risk areas identified in the National Risk Assessment (NRA).
  • Dominica takes a reactive approach to identifying ML cases, and professional networks, cash smuggling, complex ML cases, and cases involving legal persons are not being detected.
  • The confiscation of criminal proceeds is pursued as a policy objective but is not effectively enforced.

Recommendations for Improvement

  • Improve the effectiveness of ML investigations and prosecutions by prioritizing cases involving professional networks, cash smuggling, complex ML, and cases involving legal persons.
  • Enhance confiscation efforts to effectively enforce freezing, seizing, and confiscating instrumentalities and proceeds of crimes.

Terrorist Financing (TF)

Legislative Framework and Risk Assessment

  • Dominica has a strong legislative framework for TF, but the NRA did not consider several vulnerabilities, including cross-border wire transfers, non-profit organizations (NPOs), legal persons, and virtual asset service providers (VASPs).
  • Authorities have not prosecuted any cases relating to TF in the period under review.

Counter-Financing of Terrorism (CFT) Policy

  • The country lacks a national CFT policy that would continuously assess the TF threat and identify requirements for training and professional development of competent authorities.
  • Central Authority procedures do not accurately distinguish between what is required under UN Security Council Resolutions 1267 and 1373, and the freeze-without-delay mechanism is deficient.

Recommendations for Improvement

  • Develop a national CFT policy that continuously assesses the TF threat, identifies requirements for training and professional development of competent authorities, and allows for the development of policies by competent authorities in line with this national CFT policy.
  • Improve Central Authority procedures to accurately distinguish between what is required under UN Security Council Resolutions 1267 and 1373, and enhance the freeze-without-delay mechanism.

Conclusion

The report highlights several weaknesses in Dominica’s ML and TF framework, including a lack of proactive approach to identifying ML cases, ineffective confiscation efforts, and inadequate CFT policies. The recommendations aim to address these gaps and strengthen Dominica’s capacity to combat ML and TF.