Dominica’s Strong Commitment to Fighting Financial Crime Masks Underlying Risks

A recent assessment by international experts has highlighted that Dominica’s strong commitment to national strategy and policy setting has triggered additional initiatives since the last assessment. The country’s control framework and interdiction efforts have been enhanced through significant coordination and cooperation between authorities.

However, despite these positive developments, more work is required to fully understand related risks. The following areas require attention:

• Comprehensive ML/TF assessments of non-profit organizations (NPOs), legal persons, virtual asset service providers (VASPs), cross-border wire transfers, and the Citizenship by Investment (CBI) program
• Updated Financial Intelligence (FI) and Designated Non-Financial Businesses and Professions (DNFBP) sectoral risk assessments to enhance the country’s understanding of its ML/TF risk profile

Dependence on CBI Program Raises Concerns

Dominica’s reliance on the CBI program, which has contributed significantly to the country’s economic growth, raises concerns about the potential risks associated with this scheme. The assessment highlighted that the NRA did not consider several TF vulnerabilities, including:

• Cross-border wire transfers
• NPOs
• VASPs

Lack of Prosecutions for TF and PF

The authorities in Dominica have not prosecuted any cases relating to Terrorist Financing (TF) or Proliferation Financing (PF) during the period under review. While seven cases were investigated, six were closed, and the remaining case was considered for ML prosecution.

Need for a National CFT Policy

The country lacks a national CFT policy that would continuously assess the TF threat, identify requirements for training and professional development of authorities, and allow for the development of policies by authorities which would be in line with this national CFT policy. The implementation of TFS-TF without delay is hindered by the absence of a comprehensive national CFT policy.

Recommendations

To address the identified risks and vulnerabilities, the assessment highlights the following recommendations:

• Conduct a comprehensive sector review of NPOs to inform the country’s assessment of TF risk
• Implement targeted outreach, oversight, or training for supervisors of NPOs
• Provide specific guidance on TFS obligations to FIs and DNFBPs
• Issue guidance on TF risks and vulnerabilities in NPOs to FIs and DNFBPs

Overall, while Dominica has made significant progress in strengthening its control framework and interdiction efforts, more work is required to address the underlying risks and vulnerabilities identified during the assessment.