Financial Crime World

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Dominica’s Financial Sector Needs Strengthened Controls Amid Low ML/TF Risk Profile

Port of Spain, Trinidad and Tobago - A recent assessment by international experts has revealed that Dominica’s financial sector requires strengthened controls to mitigate money laundering (ML) and terrorist financing (TF) risks. While the country’s risk profile is currently considered low, the assessment highlighted several areas where improvement is needed.

Strong Commitment to National Strategy and Policy Setting

The report commended Dominica for its strong commitment to national strategy and policy setting, as well as significant coordination and cooperation among its financial intelligence agencies. However, it also noted that more work is required to understand related risks, including:

  • A comprehensive ML/TF assessment of non-profit organizations (NPOs)
  • Legal persons
  • Virtual asset service providers (VASPs)
  • Cross-border wires
  • The Citizenship by Investment (CBI) programme

Key Area of Concern: CBI Programme

The CBI programme, which accounts for 30% of Dominica’s GDP, was identified as a key area of concern. The report recommended that the country conduct a thorough assessment of its CBI programme to identify vulnerabilities and implement measures to mitigate ML/TF risks.

National Counter-Terrorism Financing (CFT) Policy

In terms of TF, the report noted that while Dominica has a strong legal framework in place, it lacks a national CFT policy. This policy would help to continuously assess the TF threat, identify training needs for financial intelligence agencies, and develop policies aligned with international standards.

Supervisory Authorities Need Improvement

The assessment also highlighted several areas where supervisory authorities need to improve their oversight and guidance to regulated entities, including:

  • Providing specific training on TF risks and vulnerabilities in NPOs
  • Implementing targeted outreach and oversight of NPOs by supervisors
  • Strengthening guidance to regulated entities on their obligations under TFS-TF

Conclusion

While Dominica’s ML/TF risk profile is currently considered low, the country must take concrete steps to strengthen its financial sector controls and address identified vulnerabilities. Failure to do so could lead to reputational and economic harm.

Recommendations

  1. Conduct a comprehensive ML/TF assessment of NPOs, legal persons, VASPs, cross-border wires, and the CBI programme.
  2. Develop a national CFT policy that continuously assesses the TF threat and identifies training needs for financial intelligence agencies.
  3. Provide specific training on TF risks and vulnerabilities in NPOs to supervisors and regulated entities.
  4. Implement targeted outreach and oversight of NPOs by supervisors.
  5. Strengthen guidance to regulated entities on their obligations under TFS-TF.

Source

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