Financial Crime World

Dominican Republic Toughens Stance on Money Laundering with New Regulations

The Dominican Republic has taken significant steps to combat money laundering and related crimes, enacting new legislation that aligns the country’s anti-money laundering (AML) framework with international standards. This move is expected to boost transparency, enhance regulation, and strengthen cooperation with global organizations.

Historical Background

Inter-American Convention Against Corruption and UN Convention Against Transnational Organized Crime

In 2002, the Dominican Republic ratified the Inter-American Convention Against Corruption and the United Nations Convention Against Transnational Organized Crime. However, these agreements led to changes in AML recommendations in 2012, prompting the country to introduce new legislation to address money laundering, terrorism financing, and other severe threats to the international financial system.

The New Anti-Money Laundering and Terrorist Financing Act

Enhancing Regulation and Promoting Transparency

On June 1, 2017, the Dominican Republic’s Executive Power promulgated the new Anti-money Laundering and Terrorist Financing Act (155-17). This legislation replaces the outdated Anti-Money Laundering Act of 2002, providing a more robust, coherent, and modern legal structure.

The New Law aims to regulate money laundering and terrorist financing effectively, promote transparency, and facilitate international collaboration. Its primary objectives include:

  • Enhancing regulation to align with international guidelines
  • Promoting transparency through the sharing of information about economic agents and their beneficial owners
  • Facilitating cooperation with international organizations and global efforts to combat financial crimes

Protecting Against Blacklisting

One critical aspect of the New Law is its role in protecting the Dominican Republic from being placed on the Financial Action Task Force’s (FATF) ‘blacklist.’ This designation could deter foreign investment and adversely affect the nation’s economy.

The New Law provides mechanisms for imposing sanctions on individuals involved in illegal financial activities, safeguarding both foreign and domestic investments and the welfare of Dominican citizens.

AML Regulators

In the Dominican Republic, several institutions play a crucial role in combating money laundering. These include:

  • Financial Analysis Unit (UAF): Responsible for receiving, requesting, analyzing, and disclosing reports of suspected financial activities
  • National Anti-Money Laundering Committee: Coordinates policies to prevent, discover, and repress laundered assets
  • Custody and Management of Seized Assets Office: Safeguards, administers, and sells confiscated assets related to crimes outlined in the law

Conclusion

The Dominican Republic’s commitment to combating money laundering and terrorist financing is evident through its adoption of international conventions and the enactment of the New Anti-Money Laundering and Terrorist Financing Act. These efforts align the country with global AML standards, bolster transparency, and promote collaboration with international organizations.

For investors, businesses, and individuals considering involvement in the Dominican Republic, these AML regulations provide a level of assurance and security. By staying updated with these regulations and cooperating with relevant authorities, stakeholders can contribute to a safer and more secure financial environment in the Dominican Republic.