Dominican Republic Enhances Anti-Money Laundering and Terrorist Financing Regulations
Strengthening Regulatory Controls for Access to Foreign Credit
The Dominican Republic has introduced new anti-money laundering (AML) and terrorist financing regulations, effective as of June 1st, 2017. This move aims to improve due diligence and data transparency around financial transactions, ensuring compliance with international standards.
Expansion of Regulations to Non-Financial Professions
The updated Anti-money Laundering and Terrorist Financing Act now applies not only to financial institutions but also to various non-financial professions, including:
- 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
- Accountants
Implementation of Compliance Programs
Entities subject to the regulations are required to introduce and maintain a compliance program that includes:
- Detailed policies and procedures for evaluating money laundering and terrorist financing risks
- Risk management and mitigation strategies
- Due diligence on clients and their ultimate beneficial owners
- Monitoring client financial activities
- Reporting suspicious activity
Enhanced Customer Due Diligence
Entities must verify the identity of clients and their ultimate beneficial owners from reliable and independent sources, rather than simply requesting this information from the client.
Severe Penalties for Non-Compliance
Failure to comply with the new regulations can result in severe penalties, including fines of millions of pesos and imprisonment. To help businesses meet these requirements, automated systems such as Firco Compliance Link are available.
Government Commitment to Financial Regulation
The Dominican Republic has already taken steps to progress in this area, consulting Accuity on how to achieve best practices in financial crime compliance and receiving practical recommendations from subject matter experts. The government is committed to driving forward the development of a trustworthy and well-regulated financial environment that will bring DR onto the international stage.
Industry Expert Confidence
According to Jay Ryan, Executive Vice President for Accuity, “the new requirements are stringent and will require work to implement effectively, but the new Act marks a significant step in DR’s history. We feel confident that the government has the right spirit to drive forward the development of a trustworthy and well-regulated financial environment.”