Financial Crime World

Title: Dominican Republic Cracks Down on Money Laundering with New Anti-Money Laundering Law

Fighting Financial Crimes in the Dominican Republic

Amidst growing concerns over money laundering and terrorist financing, the Dominican Republic has taken strong measures to strengthen its anti-money laundering (AML) framework. In this article, we discuss the country’s recent regulatory developments and its commitment to combating financial crimes effectively.

Regulatory evolution

The Dominican Republic, a popular tourist destination and financial hub, has faced accusations of being a haven for money laundering. To address these concerns, the country has ratified several international treaties and conventions, such as:

  1. Inter-American Convention Against Corruption (1996)
  2. United Nations Convention Against Transnational Organized Crime (2002)

In 2002, the Dominican Congress enacted Law 72-02 to regulate areas covered by these conventions. However, international AML measures underwent significant changes in 2012, prompting the Dominican National Congress to develop new legislation. The new Anti-Money Laundering and Terrorist Financing Act 155-17, which went into effect on June 1, 2017, aims to modernize and align the Dominican legal framework with contemporary international standards.

Key Objectives of the New Law

The new law sets out to:

  1. Enhanced Regulation: Effectively regulate money laundering and terrorist financing to meet international guidelines.
  2. Transparency: Promote transparency by requiring the identification and reporting of beneficial owners and sharing information about economic agents and their activities.
  3. International Collaboration: Facilitate the Dominican Republic’s cooperation with international organizations to access foreign financing and participate in global efforts to combat financial crimes.

Safeguarding the Dominican Republic

One crucial aspect of the New Law is its role in safeguarding the Dominican Republic from being placed on the Financial Action Task Force’s (FATF) ‘blacklist.’ FATF designation can deter foreign investment and adversely impact a country’s economy. The New Law also allows for imposing sanctions on individuals involved in illegal financial activities, protecting both foreign and domestic investments and the welfare of Dominican citizens.

Key Regulators in the Dominican Republic

  1. The Financial Analysis Unit (UAF): The primary AML regulator in the Dominican Republic, it receives, requests, analyzes, and discloses reports of suspected financial activities and cash transactions worth more than $10,000. It also offers technical assistance to other competent authorities in AML matters.

Other Regulators

  1. The National Anti-Money Laundering Committee: This body coordinates policies to prevent money laundering and advises the Executive Power on legal and administrative actions to improve AML procedures.
  2. The Custody and Management of Seized Assets Office: This office safeguards, administers, and sells confiscated assets related to crimes outlined in the law. It can also engage in agreements with domestic and international private enterprises for managing confiscated assets.
  3. The Central Bank of the Dominican Republic
  4. The Superintendence of Banks
  5. The National Drug Council
  6. The Secretariat of Finance

The Dominican Republic’s efforts to strengthen its AML framework demonstrate its commitment to combating money laundering and terrorist financing. By aligning with international standards and maintaining a robust regulatory environment, the country is creating a secure financial environment that attracts investor confidence.