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Dominican Republic Tightens Anti-Money Laundering Regulations
The Dominican Republic government has strengthened its efforts to combat money laundering and terrorism financing through a revamped anti-money laundering (AML) and combating the financing of terrorism (CFT) regulatory framework. At the heart of this initiative is the National Committee against Money Laundering and Terrorism Financing, a collegiate body responsible for preventing, detecting, controlling, and combating money laundering and terrorist financing.
Key Government Agencies
Several government agencies have been designated as competent authorities to enforce AML/CFT regulations in the Dominican Republic:
- Public Ministry
- Financial Analysis Unit (UAF): attached to the Ministry of Finance
- National Directorate for Drug Control
- Monetary Board
- General Directorate of Internal Taxes
- General Directorate of Customs
- Directorate of Casinos and Gaming
- Cooperative Development and Credit Institute
- Superintendents of Insurance, Banks, Securities, Pension Fund, and Private Security
The Financial Analysis Unit (UAF)
The UAF is an autonomous entity that serves as the technical secretary to the National Committee against Money Laundering and Terrorism Financing. Its primary responsibility is to analyze, identify, and submit financial analysis reports to the Public Ministry regarding potential money laundering activities, previous offenses, and terrorist financing.
Compliance Requirements
To comply with AML/CFT regulations in the Dominican Republic, all regulated entities must constantly evaluate and intensify their compliance efforts against money laundering and terrorist financing activities. This includes:
- Developing or reviewing a compliance program that focuses on a risk-based approach
- Implementing policies and procedures to manage and mitigate risks
- Conducting client due diligence or enhanced due diligence
- Continuously monitoring transactions and reporting suspicious operations to the UAF
Reporting Suspicious Operations
In the Dominican Republic, regulated entities must report suspicious operations to the UAF within five business days after the transaction occurred or was attempted. These operations are defined as complex, unusual, significant, or non-significant but periodic transactions that do not have an obvious economic or legal basis, and may be indicative of money laundering or terrorist financing activities.
The UAF has published a guide for obligated subjects to help categorize transactions that require closer examination. Each regulatory sector establishes assumptions indicative of characteristics of transactions or operations that can be considered suspicious.
Staying Ahead of the Game
To ensure compliance with AML/CFT regulations in the Dominican Republic, regulated entities must stay informed about changes and updates to the regulatory framework. By implementing robust policies, procedures, and controls, and designating a compliance officer with determined functions and responsibilities, entities can mitigate risks and avoid potential penalties.
By working together with the National Committee against Money Laundering and Terrorism Financing, regulated entities can help prevent money laundering and terrorist financing activities in the Dominican Republic.