Financial Crime World

CFATF Report: Dominica’s Progress and Challenges in Financial Crime Prevention

The Caribbean Financial Action Task Force (CFATF) has published its latest assessment report on the Commonwealth of Dominica’s progress and challenges in combating financial crimes, specifically money laundering (ML) and terrorist financing (TF). The onsite evaluation was conducted from August 15 to 26, 2022.

Key Findings

The assessment identified several important aspects of Dominica’s efforts to prevent financial crimes:

  1. Money laundering threats: Dominica has identified various ML risks, such as drug trafficking, burglary, theft, fraud, and ATM scams, as well as possession and trafficking of firearms and ammunition. Further analysis is necessary to accurately assess risks in different sectors and activities.

  2. Progress and challenges: Improvements have been made in recent years, including ratifying UNSCRs 1267 and 1373 and establishing a Financial Intelligence Unit (FIU). However, the need for stronger coordination and cooperation between competent authorities and a proactive approach to detecting and preventing ML is highlighted.

Financial Intelligence and ML Investigations

The report indicates that Dominica’s authorities have access to various sources of financial intelligence for ML investigations. The FIU has seen notable improvements, with increased staffing and the implementation of specialized investigations and analytical departments. Nonetheless, there is still room for improvement in terms of staffing and coverage of high-risk areas identified in the National Risk Assessment (NRA).

Dominica’s legal framework for ML investigations and prosecutions is sound, with criminalization of ML under the Proceeds of Crime Act (POCA) and supervisory bodies overseeing financial institutions and Designated Non-Financial Businesses and Professionals (DNFBPs). However, Dominica should strengthen its legislation and implementation in areas such as transparency and beneficial ownership of legal persons and arrangements and reporting requirements for DNFBPs.

International Cooperation

Dominica has demonstrated a commitment to international cooperation in matters related to Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT). However, improvements are needed in areas like implementing targeted financial sanctions related to terrorism and TF and ensuring adequate training and awareness for Financial Institutions (FIs) and DNFBPs about their obligations to report suspicious transactions.

Recommendations

The CFATF has presented several recommendations for Dominica to enhance its AML/CFT regime. Some of these recommendations include:

  • National Risk Assessment: Conducting a comprehensive review and assessment of the NRA, focusing on high-risk areas and updating sectoral risk assessments.
  • Cooperation and Coordination: Enhancing cooperation and coordination among competent authorities and key stakeholders in Dominica.
  • Beneficial Ownership: Improving the availability of sufficient, accurate, and up-to-date beneficial ownership information on legal persons and arrangements.
  • Financial Sanctions: Implementing targeted financial sanctions related to terrorism and TF without delay.
  • FI and DNFBPs: Ensuring all FIs and DNFBPs fully understand ML/TF risks, AML/CFT obligations, and preventive measures.
  • National TF Policy: Establishing a national TF policy to assess and guide CAs in addressing TF risks.
  • Resources and Support: Providing sufficient human capital, financial resources, and access to improved data, statistics, and ML/TF risk assessment information for CAs.

Dominica must address these recommendations to effectively strengthen its AML/CFT regime and successfully combat financial crimes.