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Dominican Republic Adopts Risk-Based Approach to Anti-Money Laundering and Combating Financing of Terrorism

The government of the Dominican Republic has taken a significant step towards combating money laundering and financing of terrorism by adopting a risk-based approach to anti-money laundering (AML) and combating the financing of terrorism (CFT). This approach is designed to ensure that financial institutions and other regulated entities are better equipped to identify and report suspicious transactions.

Identified Competent Authorities

The National Committee against Money Laundering and Terrorism Financing, responsible for preventing, detecting, controlling, and combating money laundering and financing of terrorism, has identified several competent authorities in the country. These authorities include:

  • 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 from various sectors

Role of the UAF

The UAF is an autonomous entity that serves as the technical secretary to the National Committee against Money Laundering and Terrorism Financing. Its main task is to analyze and identify possible infractions of money laundering and financing of terrorism, and submit financial analysis reports to the Public Ministry.

Compliance Requirements for Regulated Entities

To comply with AML/CFT regulations in the Dominican Republic, all regulated entities must adopt a risk-based approach to their compliance programs. This includes:

  • Evaluating money laundering and terrorist financing risks
  • Developing policies and procedures to manage and mitigate these risks
  • Conducting client due diligence or enhanced due diligence
  • Maintaining transaction registries
  • Designating a compliance officer
  • Reporting unusual transactions to the UAF

Reporting Suspicious Operations

Regulated entities are also required to report Suspicious Operations to the UAF within five business days after they occur. Suspicious Operations include:

  • Complex, unusual, significant, or non-significant transactions that do not have an obvious economic or legal basis
  • Transactions that generate a suspicion of being involved in money laundering or financing of terrorism

Guide to Obliged Subjects

To assist regulated entities in fulfilling their reporting obligations, the UAF has published a guide to Obliged Subjects. This guide allows entities to categorize operations that need to be examined more closely and determine whether they should report a suspicious activity. Each regulatory sector also establishes a series of assumptions indicative of characteristics of transactions or operations that can be considered suspicious.

Conclusion

By adopting a risk-based approach to AML/CFT, the Dominican Republic is taking a significant step towards combating money laundering and financing of terrorism. Regulated entities must ensure that their compliance programs are robust and effective in identifying and reporting suspicious transactions to prevent these illegal activities from occurring.