Financial Crime World

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Dominica’s Risk-Based Approach to AML/CFT Under Scrutiny

The latest Mutual Evaluation Report on Dominica has been published by the Financial Action Task Force (FATF), assessing the country’s compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Progress and Compliance

According to the report, Dominica has made significant progress in implementing AML/CFT measures. The country has largely complied with several recommendations, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • Having national cooperation and coordination mechanisms in place (R.2)
  • Implementing measures to prevent terrorist financing, including targeting financial sanctions related to terrorism and terrorist financing (R.6)

Areas for Improvement

However, the report also identified areas where Dominica needs to improve its AML/CFT regime:

  • Non-compliance with recommendations on financial institution secrecy laws (R.9)
  • Relying too heavily on third parties for due diligence (R.17)
  • Partial compliance with measures related to transparency and beneficial ownership of legal persons and arrangements (R.24 and R.25)

Risk-Based Approach

The report praised Dominica’s efforts in implementing a risk-based approach to AML/CFT, which has enabled the country to focus on high-risk areas and individuals. The government has also made significant progress in strengthening its financial intelligence unit and cooperation with international partners.

Areas for Further Improvement

However, the FATF highlighted several areas where further improvement is needed:

  • Increasing transparency in corporate ownership
  • Improving the regulation and supervision of financial institutions and designated non-financial businesses and professions (DNFBPs)

Conclusion

Overall, the report concludes that Dominica has made significant progress in implementing AML/CFT measures but still needs to address certain deficiencies. The government will need to take concrete steps to improve its regime and meet the standards set by the FATF.