Financial Crime World

Here is the article rewritten in Markdown format:

Dominica’s Financial Sector Faces ML/TF Risks Despite Strong Commitment to National Strategy

A recent assessment by international financial experts has highlighted several areas of concern for Dominica’s financial sector, despite its strong commitment to national strategy and policy setting. The country’s low TF risk profile is a positive development, but more work is required to understand related risks.

Comprehensive ML/TF Assessment Needed

The assessment found that while the country has made significant progress in developing its control framework and interdiction efforts, there are still several areas that require attention. A comprehensive ML/TF assessment of:

  • Non-profit organizations (NPOs)
  • Legal persons
  • Virtual asset service providers (VASPs)
  • Cross-border wires
  • The Citizenship by Investment Programme

is necessary to enhance Dominica’s understanding of its ML/TF risks.

CBI Programme Remains a Concern

The assessors noted that Dominica’s CBI programme, which accounts for 30% of the country’s GDP, remains a concern. While the programme has generated significant revenue and economic growth, it also poses risks related to money laundering and terrorist financing.

TFS - TF Implementation Lags Behind

In addition, the assessment found that while Dominica has updated its legal framework required by UNSCR 1267 and 1373, the implementation of TFS-TF has lagged behind. The country’s Central Authority procedures do not accurately distinguish between requirements under the two UNSCR resolutions, and the freeze without delay mechanism is also deficient.

Supervisors Must Take Action

The assessors emphasized that supervisors must take action to address these concerns. Specifically, they noted that:

  • The Financial Services Union (FSU) has not issued guidance on TFS to financial institutions or designated non-financial businesses and professions (DNFBPs) on their obligations.
  • The FSU has not provided specific training to regulated entities (REs) on TF risks and vulnerabilities in NPOs.

Next Steps

To address these concerns, Dominica must take concrete steps to:

  • Enhance its ML/TF risk assessment
  • Improve its CBI programme
  • Implement TFS-TF measures effectively
  • Provide guidance to REs and DNFBPs on their obligations under TFS
  • Provide specific training to NPOs on TF risks and vulnerabilities

Conclusion

While Dominica has made significant progress in developing its financial sector, there are still several areas that require attention. To address these concerns, the country must take concrete steps to enhance its ML/TF risk assessment, improve its CBI programme, and implement TFS-TF measures effectively.