New Anti-Money Laundering Law: Tightening Regulations in Dominican Republic

The Dominican Republic took a notable step towards enhancing its legal framework against money laundering and terrorist financing with the enactment of the new Anti-Money Laundering and Terrorist Financing Act 155-17. This law was promulgated on June 1, 2017, aiming to meet international standards and boost the nation’s transparency.

Key Updates and Expansions

• The new law updates the existing framework established by the Anti-Money Laundering Act 72-02 from 2002
• Regulates money laundering and terrorist financing activities more efficiently
• Abides by international guidelines for transparency and information exchange

Competent Authorities and Definitions

• Several competent authorities have been introduced, including the Financial Analysis Unit, Monetary Board, Insurance Superintendence, Securities Superintendence, and others, to oversee money laundering detection and prevention
• Key terms like “shell banks,” “correspondent bank,” “beneficial owner,” “objective circumstances,” “regular due diligence,” “simplified due diligence,” “enhanced due diligence,” and “preceding or determinant infraction” have been defined

Risk-based Approach and International Cooperation

• The law introduces a more comprehensive definition of money laundering and heightened compliance standards
• Establishes a definition for “politically exposed person” and calls for a risk-based approach for anti-money laundering and financial terrorism supervision
• Provides substantial provisions for international cooperation in preventing money laundering and terrorist financing

Expanded Regulations and Reporting Requirements

• newly regulated parties include trust companies, savings and loan cooperatives, reinsurance companies, investment funds, securitization companies, broker/dealers, depository trust corporations, issuers of public offerings, lotteries and sports betting companies and concessionaries, factoring companies, pawn houses, and construction companies
• Lawyers, notaries, and accountants are now subject to the provisions of the New Law when they participate in transactions on behalf of their clients

Enhanced Compliance Standards and Cash Transaction Limits

• Regulated parties must create or enhance compliance programs focused on a risk-based approach
• Cash payment limits for certain transactions have been imposed
• The cash transaction threshold for reporting has been raised

Sanctions and Penalties

• A new catalog of infractions with varying sanctions has been established to enforce the New Law

Looking Ahead

• Compliance with the New Law necessitates significant efforts from financial and non-financial regulated parties
• They will need to evaluate and enhance their existing compliance programs, implement additional training, and maintain robust policies, procedures, and controls.