Title: Dominica Cracks Down on Money Laundering: New Regulations Enforce Strict Reporting and Identification Requirements

Introduction

Dominica has strengthened its stance against financial crime with the introduction of the Money Laundering Prevention Regulations, 2013. These regulations aim to prevent illicit money laundering activities by outlining comprehensive procedures and training programs for financial institutions and businesses in Dominica.

Regulations and Compliance

These regulations apply to all persons carrying on relevant business in Dominica, including banking, trusts, insurance, investment, and financial services companies.

Systems and Training

To maintain compliance, businesses must implement and adhere to specific systems and training guidelines outlined in Part II of the regulations:

• Identification procedures, business relationships, and transactions
• Record-keeping procedures
• Internal reporting procedures
• Internal controls and communication protocols
• An audit function
• Screening procedures when hiring employees

Training

Staff must undergo regular training in recognizing and handling suspicious transactions. New employees must receive comprehensive orientation programs detailing the organization’s anti-money laundering (AML) policies and procedures, as stated in Regulation 15. All key staff and management must receive refresher training annually to maintain their knowledge of money laundering risks and the organization’s AML procedures.

Offences and Penalties

Failure to comply with the regulations may result in severe penalties for both businesses and individuals. Penalties include fines of up to $40,000 and imprisonment for up to two years for corporate bodies, partnerships, and unincorporated associations, as well as their directors, managers, and other officers (Regulation 4).

Identification and Other Procedures

Businesses are required to establish and verify the identity of each customer before conducting transactions or entering into business relationships (Regulation 9). Part III of the regulations outlines procedures for identifying new customers and ongoing business relationships.

Identifying New Customers

Documentation such as identification records or other reliable sources are required to ensure the customer’s identity, and information regarding the business relationship’s purpose and nature must be obtained.

Ongoing Business Relationships

Ongoing due diligence and customer identification measures are necessary. If a business relies on an intermediary for identification procedures, measures must be taken to ensure their suitability and regulatory compliance (Regulation 13).

Exemptions and Exclusions

The regulations do provide exemptions and exclusions to facilitate transactions in certain circumstances. Transactions made via electronic funds transfer or payment methods like post, hand delivery, or electronic means fall under these exemptions, but businesses must still maintain AML procedures in place (Regulation 14).

Conclusion

Dominica’s new Money Laundering Prevention Regulations are a significant step forward in the country’s efforts to combat financial crime. Companies and financial institutions must strictly adhere to the outlined procedures, maintain rigorous training programs, and ensure effective record-keeping to combat potential money laundering activities and maintain regulatory compliance.

References

1. Regulation 4 - Offences by body corporate, partnerships and unincorporated associations.
2. Regulation 9 - Identification and verification of customer identity.
3. Regulation 13 - Identification measures where reliance placed on intermediary.
4. Regulation 14 - Identification procedure where payment by post, delivered by hand or electronically.