Dominica’s Fight Against Money Laundering and Terrorist Financing: A Mixed Bag

A recent review of Dominica’s efforts to combat money laundering (ML) and terrorist financing (TF) has revealed a mixed bag of progress and challenges. While the country has made significant strides in strengthening its legal framework, there are concerns about the effectiveness of its implementation and enforcement.

Money Laundering

• The review noted that Dominica has demonstrated instances of ML investigations and prosecutions, but the number of cases is not commensurate with its risk profile.
• The country’s approach to identifying ML cases is reactive rather than proactive, and it appears that complex ML cases involving professional networks are not being detected.

Terrorist Financing

• Dominica has a strong legal framework in place, but there are concerns about its effectiveness.
• The review noted that the country has not prosecuted any TF cases in the period under review, and the absence of convictions makes it difficult to assess the effectiveness of sanctions.

Financial Intelligence Unit (FIU)

• The FIU plays a crucial role in identifying ML and TF risks, but the review noted that:
  • The number of disseminations from the Analytical Department could be improved.
  • Strategic analysis does not sufficiently reflect all higher-risk areas identified in the National Risk Assessment (NRA).

Confiscation of Criminal Proceeds

• The confiscation of criminal proceeds is a policy objective in Dominica, and there is a sound legal framework in place.
• However, the review noted that the declaration system for cross-border movements of cash or bulk cash transactions (BCTs) is not being effectively enforced.

Terrorist Financing: Specific Challenges

• The review found that:
  • While Dominica has updated its legal framework to comply with United Nations Security Council Resolutions 1267 and 1373, there are concerns about the accuracy of its Central Authority procedures.
  • The Financial Supervision Unit (FSU) has implemented training for regulated entities, but specific guidance on terrorist financing obligations has not been issued.

Non-Profit Organizations (NPOs)

• The review noted that:
  • NPOs were not assessed in the NRA and have not received targeted outreach or oversight from the FSU.
  • Substantial work remains to be done in relation to NPOs.

Conclusion

While Dominica has made progress in strengthening its legal framework, there are concerns about the effectiveness of its implementation and enforcement. The country must continue to work on improving its dissemination processes, enhancing its TF risk assessment, and providing targeted training and guidance to regulated entities and other stakeholders.