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Dominican Republic Takes Major Step Towards Financial Transparency
In a significant move towards combating financial crimes, the Dominican Republic has introduced new regulations to strengthen anti-money laundering (AML) and terrorist financing laws. The new Anti-Money Laundering and Terrorist Financing Act came into effect on June 1st, 2017, replacing the existing Anti-Money Laundering Act.
The legislation is based on recommendations from the Financial Action Task Force (FATF), a G7 organization that aims to combat money laundering globally. The new law seeks to improve due diligence and data transparency around financial transactions and involves a wider group of professionals in the fight against financial crime.
Broader AML Obligations for Non-Financial Businesses
One of the key changes introduced by the Act is the extension of AML compliance requirements to non-financial businesses. This includes:
- Savings and loan cooperatives
- Lotteries and sports betting companies
- Factoring companies
- Pawn houses
- Traders in vehicles, metals, precious stones, and jewelry
- Construction companies
- Real estate brokers
- Lawyers, notaries, and accountants
These professionals are now required to establish and maintain a compliance program that includes policies and procedures for evaluating money laundering risks, managing risk effectively, conducting due diligence on clients, monitoring client financial activities, and reporting suspicious activity.
Enhanced Customer Due Diligence
The Act also introduces enhanced customer due diligence requirements. Professionals must verify the identity of their clients and any individuals acting on behalf of a client, as well as identify the ultimate beneficial owner of companies. This information must be obtained from reliable and independent sources, not just by asking the client.
Penalties for Non-Compliance
The penalties for failing to comply with the Act are severe, including fines of millions of pesos and imprisonment in some cases.
Automated Systems Can Help Meet Compliance Requirements
To help businesses meet these new compliance requirements, automated systems such as Firco Compliance Link and Firco Online Compliance can be used. These solutions provide a consolidated view of account, transaction, and trade activity, and can be configured to meet individual risk appetite. They also create a clear audit trail that regulators expect.
The Dominican Republic’s Move Towards Financial Transparency
The Dominican Republic’s move towards financial transparency marks a significant step in its history. With the right spirit and support from businesses and professionals, the country can develop a trustworthy and well-regulated financial environment that will bring it onto the international stage.