Financial Crime World

Dominica Fails to Meet FATF Recommendations on Anti-Terrorism Financing Regulations

A recent assessment of Dominica’s anti-terrorism financing regulations has revealed significant shortcomings in the island nation’s efforts to combat money laundering and terrorist financing. The assessment, conducted by the Financial Action Task Force (FATF), a global watchdog that sets standards for anti-money laundering and combating the financing of terrorism (AML/CFT) measures, found that Dominica is largely non-compliant with several key recommendations.

Shortcomings in Dominica’s AML/CFT Measures

The FATF evaluation examined 40 recommendations related to AML/CFT measures, including requirements for assessing risk, national cooperation and coordination, and targeted financial sanctions. Unfortunately, Dominica was found to be non-compliant in several areas:

  • R.3: Money laundering offence: Dominica’s laws do not fully criminalize money laundering.
  • R.5: Terrorist financing offence: The country’s laws do not adequately criminalize terrorist financing.
  • R.13: Correspondent banking: Dominica’s regulations do not effectively regulate correspondent banking relationships.
  • R.29: Financial intelligence units: The country’s financial intelligence unit is not functioning as intended.

Concerns and Recommendations

While Dominica was found to be compliant in several areas, such as customer due diligence and record keeping, the non-compliance in key areas raises concerns about the effectiveness of the country’s AML/CFT measures. The FATF has called on Dominica to address these shortcomings and implement the necessary reforms to strengthen its anti-terrorism financing regulations.

Government Response

In response to the assessment, the government of Dominica has announced plans to strengthen its AML/CFT measures, including:

  • Establishment of a new financial intelligence unit: To improve national cooperation and coordination in combating money laundering and terrorist financing.
  • Implementation of enhanced customer due diligence requirements: To ensure that financial institutions are effectively identifying and mitigating the risk of money laundering and terrorist financing.

Way Forward

The success of Dominica’s efforts to combat money laundering and terrorist financing will depend on its ability to implement effective AML/CFT measures that meet the standards set by the FATF. The country must take a proactive approach to addressing these challenges and ensuring that its anti-terrorism financing regulations are robust and effective.

Conclusion

Dominica’s failure to meet FATF recommendations highlights the need for improved AML/CFT measures in the island nation. The government must address these shortcomings and implement necessary reforms to strengthen its anti-terrorism financing regulations, ultimately ensuring that its financial system is safe from money laundering and terrorist financing risks.