Dominica Embraces Risk-Based Approach to Anti-Money Laundering and Combating Terrorism Financing
Strengthening Financial Framework
The Commonwealth of Dominica has adopted a risk-based approach to supervision and regulation of financial institutions, aimed at strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) framework. This decision was taken after the Monetary Council recommended that the Eastern Caribbean Central Bank (ECCB) take over the responsibility for AML/CFT supervision and regulation of financial institutions licensed under the Banking Act.
Designation of Regulatory Authority
The ECCB is now designated as the regulatory authority for AML/CFT for its licensees, including all financial institutions in Dominica. As a result, all licensed financial institutions in the country are subject to the ECCB’s AML/CFT risk-based framework, which is premised on the concepts and principles of the Financial Action Task Force and the Basel Core Principles.
Revised AML/CFT Supervision Framework
The revised AML/CFT supervision framework includes a range of measures aimed at ensuring the effective implementation of anti-money laundering and combating terrorism and proliferation financing (AML/CFT/CPF) standards. These measures include:
- AML/CFT legislation in Eastern Caribbean Currency Union member countries
- A multi-lateral Memorandum of Understanding between AML/CFT supervisory authorities for cooperation in supervision
- An AML/CFT/CPF risk-based onsite examination manual
- A prudential return on money laundering, terrorist and proliferation financing
- A risk assessment tool
- Partnerships with key stakeholders to ensure ongoing training on emerging issues
Addressing Deficiencies
The new framework is designed to address deficiencies in AML/CFT supervision identified in the Caribbean Financial Action Task Force Mutual Evaluation Reports. With its implementation, Dominica aims to:
- Strengthen its financial system
- Enhance transparency and accountability
- Reduce the risks associated with money laundering and terrorist financing