Financial Crime World

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Dominica’s Financial Sector: A Mixed Bag

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Dominica’s financial sector has been assessed as having a low risk profile for Terrorist Financing (TF) and Money Laundering (ML). While this is a positive development, there are still several areas that require improvement.

National Strategy and Policy Setting

Dominica has made significant progress in developing its national strategy and policy setting. The country has developed:

  • A National Policy (2019-2024)
  • A National Strategy (2019-2024)
  • A National Implementation Action Plan (NIAP)

This has triggered additional initiatives, including:

  • Development of Memoranda of Understanding (MOUs) between regulatory agencies
  • Increased information sharing
  • Purchase of detection equipment

Citizenship by Investment Program

Dominica’s Citizenship by Investment (CBI) program is a significant contributor to the country’s economy, accounting for 30% of GDP. While assessors were satisfied with the program’s anti-money laundering measures, there are still concerns about its potential for TF risks.

Key Concerns

  • Cross-border wire transfers
  • Non-profit organizations (NPOs)
  • Virtual asset service providers (VASPs)

Terrorist Financing Risks

Despite having a strong legal framework for criminalizing TF, Dominica’s NRA did not consider several TF vulnerabilities. The country has not prosecuted any cases relating to TF in the period under review.

Key Vulnerabilities

  • Cross-border wire transfers
  • Non-profit organizations (NPOs)
  • Virtual asset service providers (VASPs)

CFT Policy

Dominica lacks a national CFT policy that:

  • Continuously assesses the TF threat
  • Identifies requirements for training and professional development of regulatory agencies
  • Allows for the development of policies by these agencies

Key Area for Improvement

  • Development of a comprehensive national CFT policy

Training and Awareness

While regulated entities have demonstrated awareness of TFS requirements, there has been no specific guidance issued on TFS obligations by the Financial Services Unit (FSU) or training provided on TF risks and vulnerabilities in NPOs.

Key Area for Improvement

  • Provision of specific guidance on TFS obligations
  • Training on TF risks and vulnerabilities in NPOs

Conclusion

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Overall, Dominica’s financial sector has made significant progress in addressing ML and TF risks. However, there are still several areas that require improvement, including:

  • Need for a comprehensive review of NPOs and VASPs
  • Development of a national CFT policy
  • Provision of specific guidance on TFS obligations

The country’s regulatory agencies must continue to work together to address these vulnerabilities and ensure that the financial sector remains resilient to ML and TF threats.