Financial Crime World

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Dominican Republic Lags Behind in Financial Institution Due Diligence

Santo Domingo, Dominican Republic - A recent report has highlighted the country’s shortcomings in implementing key anti-money laundering and combating terrorist financing (AML/CFT) measures. The evaluation by international authorities reveals significant gaps in the nation’s ability to prevent financial crimes.

Gaps in Implementation

The assessment, which covered 40 key recommendations, showed that the Dominican Republic scored poorly on several critical areas. Notably, it was deemed non-compliant or partially compliant in roughly half of the evaluated categories. These include:

Key Areas with Significant Gaps

  • Regulation and supervision of financial institutions (R.26)
  • DNFBPs (Designated Non-Financial Businesses and Professions) (R.23)
  • International cooperation (R.37)

Performance Review

The country’s performance was deemed most satisfactory in only a handful of areas, including:

Satisfactory Performance

  • Customer due diligence (R.10)
  • Record-keeping (R.11)

However, even in these instances, the report noted that significant weaknesses remained.

Key Findings

  • The Dominican Republic was found to be non-compliant or partially compliant in 20 out of 40 evaluated categories.
  • Significant gaps were identified in areas such as correspondent banking (R.13), money transfer services (R.14), and wire transfers (R.16).
  • Only a handful of categories showed satisfactory performance, including customer due diligence and record-keeping.

Recommendations

In light of the findings, authorities are calling for the Dominican Republic to take immediate action to strengthen its AML/CFT framework. This includes:

Key Recommendations

  • Enhancing regulation and supervision of financial institutions
  • Improving measures related to DNFBPs
  • Strengthening international cooperation

Consequences

The Dominican Republic’s poor performance in AML/CFT has significant consequences for the country’s reputation as a financial hub. It also raises concerns about the potential for money laundering and terrorist financing activities in the region.

In response to the report, authorities have pledged to take swift action to address the identified gaps. However, time will tell whether the Dominican Republic can effectively implement necessary reforms to prevent further deterioration of its AML/CFT framework.