Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Compliance in Dominica

Dominica has made significant progress in updating its legal framework and procedures for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) compliance. However, despite these efforts, several areas require improvement to effectively prevent money laundering and terrorist financing.

AML Compliance

Inadequate ML Investigations and Prosecutions

• Dominica’s risk profile is not fully commensurate with its ML investigations and prosecutions.
• The country takes a reactive approach to identifying ML cases, which may lead to delayed or ineffective responses.
• Prioritization within the judicial system is lacking, hindering successful prosecution of cases.

Confiscation of Criminal Proceeds

• A sound legal framework exists for freezing, seizing, and confiscating instrumentalities and proceeds of crimes.
• However, the proportion of non-declared or falsely declared cash or bank notes that is confiscated is low.

CFT Compliance

Weaknesses in Terrorist Financing (TF) Policy

• Dominica has a strong legal framework for criminalizing TF, but its risk assessment did not consider several vulnerabilities.
• Authorities have not prosecuted any cases relating to TF in the period under review.

National CFT Policy and Training

• The country lacks a national CFT policy that would continuously assess the TF threat and identify requirements for training and professional development of competent authorities (CAs).
• Domestic cooperation amongst authorities on TF takes place to a satisfactory extent during financial investigations.

Terrorist Financing Sanctions

• Dominica has updated its legal framework required by UNSCR 1267 and 1373, but the Central Authority procedures do not accurately distinguish between what is required under the two UNSCR resolutions.
• The freeze without delay mechanism is also deficient.
• Supervisors have provided outreach to the industry in relation to TFS, TF, and PF, but specific training has not been provided by the FSU in relation to TF risks and vulnerabilities in non-profit organizations (NPOs).

Conclusion

While Dominica has made progress in updating its legal framework and procedures for AML/CFT compliance, there are still areas where improvement is needed, particularly in terms of prioritizing ML cases within the judicial system, addressing vulnerabilities in NPOs, and ensuring effective implementation of TFS-TF.