Financial Crime World

Title: Dominican Republic’s Crackdown on Money Laundering and Terrorism Financing: AML/CFT Regulations and Compliance Obligations

Dominican Republic’s War on Money Laundering and Terrorism Financing: An Overview

The Dominican Republic government has intensified its efforts to prevent and combat money laundering and terrorism financing. TheCountry’s AML/CFT regime is led by the Committee against Money Laundering and Terrorism Financing, a collegial body tasked with overseeing the prevention, detection, control, and combating of such illegal activities. Several entities have been designated as competent authorities to ensure the effective operation of the AML/CFT system.

Competent Authorities in Dominican Republic

The following entities are considered competent authorities in the Dominican Republic:

  • Public Ministry
  • Financial Analysis Unit (UAF)
  • 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

This list is not exhaustive. Any regulatory or supervisory body with the power to enforce AML/CFT regulations in specific sectors or industries is also considered a competent authority.

The Powerhouse of the AML/CFT Regime: The Financial Analysis Unit (UAF)

The UAF is a crucial component of the Dominican Republic’s AML/CFT regime. Among the competent authorities, the UAF plays a significant role in the detection, analysis, and submission of financial analysis reports on potential money laundering or terrorism financing cases to the Public Ministry.

Adhering to AML/CFT Regulations: Compliance Obligations for Regulated Parties

Regulated entities in the Dominican Republic must adhere to AML/CFT regulations by maintaining a robust compliance program, including:

  • Evaluating and managing money laundering and terrorist financing risks
  • Conducting client due diligence
  • Continuously monitoring transactions
  • Maintaining transaction records
  • Reporting unusual transactions to the UAF

Entities that do not have an existing compliance program must create one. Existing programs should be reviewed to ensure they are in line with current regulations.

Identifying Suspicious Operational Transactions: UAF Guidelines

Regulated entities in the Dominican Republic must report Suspicious Operations to the UAF within five business days of the transaction’s occurrence. Suspicious Operations are defined as transactions:

  • Complex
  • Unusual
  • Significant
  • Involving unusual patterns that do not have an obvious economic or legal basis

The UAF has published a guide to assist obliged subjects in determining if there is a need to report suspicious transactions or activities. Each regulated sector establishes a set of assumptions based on operating experience to assess the likelihood of suspicious transactions or operations. These guidelines serve as a valuable resource in the ongoing fight against financial crimes.

Conclusion

The Dominican Republic’s commitment to combating money laundering and terrorism financing continues to strengthen. Regulated entities must remain vigilant and take necessary actions to ensure compliance with AML/CFT regulations. Effective communication and collaboration between financial entities and the UAF are essential in the successful detection and analysis of potential infractions.