Financial Crime World

Title: Dominican Republic Strengthens Anti-Money Laundering Regulations: A New Era of Financial Crime Prevention

Background

Amidst a global surge in financial crimes including money laundering, terrorism financing, and organized crime, the Dominican Republic is boosting its anti-money laundering (AML) regulations to remain a reputable and secure business destination. In this article, we’ll explore the Dominican Republic’s legislative developments and commitment to upholding international AML standards.

International Commitments

The Dominican Republic, a prominent player in the Caribbean region, has pledged to curb illicit financial activities by ratifying critical international treaties and conventions, such as:

  • The Inter-American Convention Against Corruption (1996)
  • The United Nations Convention Against Transnational Organized Crime (2002)

These commitments have shaped the country’s legislative landscape, giving rise to key legislation like Law 72-02 in 2002.

Latest AML Regulations: The New Law (2017)

With the evolving nature of financial crimes and the emergence of new threats, the Dominican Republic saw the need for a significant overhaul of its 2012 AML regulations. The result was the new Anti-Money Laundering and Terrorist Financing Act 155-17 (“New Law”), which took effect on June 1, 2017. The New Law targets:

  1. Money laundering
  2. Terrorism financing
  3. Financing of weapons of mass destruction

New Law’s Essential Goals

The New Law’s significant goals are:

  1. Enhanced Regulation: The Dominican Republic’s regulatory environment has been fortified to effectively tackle money laundering and terrorist financing.
  2. Transparency: Improved transparency through information sharing about economic agents, their activities, and beneficial owners in accordance with international standards.
  3. International Collaboration: The New Law seeks to strengthen the Dominican Republic’s collaborations with international organizations, allowing access to foreign financing and fostering a unified effort in combating financial crimes.

Avoiding FATF ‘Blacklisting’

A critical concern for the Dominican Republic is avoiding Financial Action Task Force (FATF) ‘blacklisting.’ Such a designation can deter foreign investment and negatively impact the nation’s economy. The New Law provides mechanisms for imposing sanctions on individuals and entities involved in illegal financial activities, thereby protecting both domestic and foreign investments and upholding the wellbeing of Dominican citizens.

Key AML Regulators

The Dominican Republic’s key AML regulators include:

  1. Financial Analysis Unit (UAF): Established to receive, request, analyze, and disclose reports of suspected financial activities and cash transactions exceeding $10,000, the UAF serves as the primary AML regulator in the country.
  2. National Anti-Money Laundering Committee: Oversees policy coordination between sectors to prevent money laundering. Advises the Executive Power on legal and administrative actions. Manages annual budgets for the Committee and other related institutions.
  3. Custody and Management of Seized Assets Office: Safeguards, administers, and sells confiscated assets related to crimes outlined in the law and has the authority to enter into agreements with domestic and international private enterprises for asset management.

Conclusion

The Dominican Republic’s dedication to combating money laundering and terrorist financing is evident through its international commitments and the implementation of the New Anti-Money Laundering and Terrorist Financing Act. These actions bolster international AML standards, promote transparency, and foster a collaborative environment.

Investors, businesses, and individuals are encouraged to stay informed and work with local authorities to create a safer and more secure financial ecosystem in the Dominican Republic.