New Money Laundering Law Goes into Effect in Dominican Republic: Cash Payments Capped and Reporting Requirements Expanded
June 1, 2017, marked a new era in the Dominican Republic with the implementation of a revised Money Laundering framework.
Replacing the Outdated Statute No. 72-02
The new regulation, Law No. 155-17, came into effect on June 1, 2017, replacing the outdated statute No. 72-02. The government enacted this law in response to guidance from the Financial Action Task Force of Latin America (GAFILAT) to prevent potential international sanctions.
Pressure from Capital Markets and Financial Institutions
The urgency to adapt was due to growing pressure from major international capital markets and financial institutions. These entities could have closed the D.R.’s markets if the country failed to meet the standards set by organizations like GAFILAT by Fall 2017.
Significant Impacts of the New Law
Below are some significant impacts of the new law:
Limitation on Cash Transactions
- Real estate purchases above RD$1,000,000
- Motor vehicle purchases above RD$500,000
- Jewelry purchases above RD$450,000
- Corporate share transfers above RD$250,000
These transactions now require non-cash payment methods. Buyers must provide banks’ wire or swift confirmations for title transfers to be processed. There is uncertainty regarding additional filing requirements at the Registrar of Titles, Tax Office, and Chambers of Commerce. The Presidential Legal Advisory Office is working on a new law application ruling to clarify these ambiguities.
Expanded List of Non-Financial Reporting Parties
Apart from financial institutions, professionals like real estate brokers, casinos, attorneys, notaries, and accountants must establish money laundering due diligence and know-yourclient procedures and report any suspicious activities.
Broader Range of Criminal Activities
This more comprehensive regulation covers a broader range of criminal activities than its predecessor. It encompasses over 30 felonies and infractions, including financial crimes, bribery, extortion, tax evasion, insider trading, market manipulation, hi-tech crimes, and environmental infractions, among others, that now trigger money laundering reporting requirements.
Insights from Attorney Alfredo A. Guzmán Saladín
Attorney Alfredo A. Guzmán Saladín, partner at Guzmán Ariza, Attorneys-at-Law, shares his insights:
The new law will create challenges for various industries and professionals but serves the ultimate goal of combating financial crimes and ensuring transparency. For any inquiries regarding the law’s implications, contact Guzmán at aguzman@drlawyer.com or (809) 550-6400 / (829) 259-3058.
The law was contributed by Alfredo A. Guzmán, attorney and partner at Guzmán Ariza.