Dominican Republic Reinforces Financial Crimes Prevention: A Modern Anti-Money Laundering (AML) Framework

Money laundering and terrorist financing pose significant threats to the international financial system, fueling illicit activities such as drug trafficking, terrorism, and financial fraud. In response, nations are fortifying their regulatory frameworks against such criminal acts. This article provides a media perspective on the Dominican Republic’s anti-money laundering (AML) regulations and the country’s measures to combat money laundering and terrorist financing effectively.

Combatting Money Laundering and Associated Crimes: A Historical Overview

The Dominican Republic has taken decisive steps to tackle money laundering and related crimes:

1. International Agreements: Ratifying international treaties and conventions, such as the Inter-American Convention Against Corruption (1996) and the United Nations Convention Against Transnational Organized Crime (2002).
2. Legislative Action: Enacting Law 72-02 in 2002 to regulate these areas.

AML Regulatory Overhaul: 2012 to Present

A significant update to AML measures occurred in 2012 to address emerging threats like money laundering, terrorism financing, and funding for weapons of mass destruction. Subsequently, the Dominican National Congress took legislative action to strengthen the nation’s AML framework. On June 1, 2017, the new Anti-Money Laundering and Terrorist Financing Act 155-17 (New Law) was implemented.

The New Law: Modernizing the Dominican Republic’s Legal Framework

The New Law aims to modernize the Dominican Republic’s legal framework for combating money laundering and terrorist financing:

• Enhanced regulation and transparency: Align the country with global AML guidelines and promote transparency.
• International collaboration: Facilitate international cooperation.

Importance of Adhering to the New Law

The New Law shields the Dominican Republic from being blacklisted by the Financial Action Task Force (FATF). Placement on the blacklist could deter foreign investment and negatively impact the economy. The New Law also includes mechanisms for imposing sanctions on individuals engaging in illegal financial activities.

Key AML Regulators in the Dominican Republic

1. Financial Analysis Unit (UAF): Receives, requests, analyzes, and discloses reports of suspected illicit financial activities. It provides technical assistance to other competent authorities in AML matters.
2. National Anti-Money Laundering Committee: Coordinates AML policies between the public and private sectors and advises the Executive Power. Oversees annual budgets for the Committee and other institutions under the New Law.
3. Custody and Management of Seized Assets Office: Safeguards, administers, and sells confiscated assets related to crimes outlined in the law. Has the authority to engage in agreements with domestic and international private enterprises for asset management.

Other AML Regulators in the Dominican Republic

1. Central Bank of the Dominican Republic
2. Superintendence of Banks
3. National Drug Council
4. Secretariat of Finance

Conclusion

The Dominican Republic’s commitment to combating money laundering and terrorist financing is underlined by its ratification of international conventions and the enactment of the New Anti-Money Laundering and Terrorist Financing Act. For investors, businesses, and individuals considering involvement in the Dominican Republic, staying informed about these regulations and cooperating with relevant authorities is crucial in maintaining a secure and compliant financial environment.