Financial Crime World

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Dominican Republic Makes Progress in AML/CFT Efforts, but Technical Compliance Deficiencies Remain

Santo Domingo, Dominican Republic - June 2017: Enactment of Law 155-17

The Dominican Republic has made significant strides in strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) framework, according to a recent report. However, technical compliance deficiencies have been identified, highlighting areas for improvement.

Key Reforms Introduced by Law 155-17

  • Established the institutional organization
  • Criminalized money laundering (ML) and terrorist financing (TF)
  • Created a preventive and detection system for ML/TF
  • Frozen assets for weapons of mass destruction transactions

Technical Compliance Deficiencies

While the Dominican Republic has largely aligned its AML/CFT framework with international standards, technical compliance deficiencies have been observed. Specifically:

  • The Unidad de Análisis Financiero (UAF), the country’s financial intelligence unit, is still implementing an online registration and reporting system.

Effectiveness of the AML/CFT System

Outcomes are still incipient in many areas. While there have been important challenges in implementing customer due diligence measures and risk-based approaches in certain sectors, such as DNFBPs:

  • Most supervisors are only now implementing these measures.

Additionally:

  • Moderate outcomes were observed in ML investigation and prosecution.
  • Limited use of financial intelligence reports by the UAF has been noted.
  • Room for improvement exists in using financial intelligence reports.

Assessment of Risks, Coordination, and Policy Setting

The Dominican Republic performed its national risk assessment (NRA) in 2014:

  • Identified vulnerabilities and risks
  • Developed a National Strategy to address these issues, including an action plan to:
    • Improve inter-agency coordination
    • Provide training for reporting institutions
    • Implement technological tools for financial analysis

Conclusion

While the Dominican Republic has made significant progress in strengthening its AML/CFT framework, technical compliance deficiencies remain. Efforts to improve the use of financial intelligence reports and risk-based approaches will be crucial to enhancing the effectiveness of the system.