Dominica’s Anti-Money Laundering and Combating the Financing of Terrorism Efforts: Progress Made, but More Work Required

Overview

A recent assessment by the Financial Action Task Force (FATF) highlights Dominica’s strong commitment to national strategy and policy setting in its efforts to combat money laundering (ML) and combating the financing of terrorism (CFT). While significant progress has been made, more work is required to address identified vulnerabilities and risks.

Progress Made

Dominica has made significant strides in enhancing its control framework and interdiction efforts, including:

• Development of memoranda of understanding (MOUs)
• Joint operations between financial intelligence units (FIUs)
• Increased information sharing

These efforts have strengthened the country’s ability to combat ML/TF risks.

Gaps and Vulnerabilities

However, the FATF assessment notes several gaps and vulnerabilities that need to be addressed:

• ML/TF risks associated with Dominica’s Citizenship by Investment (CBI) program were not fully analyzed during the review.
• The TF threat posed by non-profit organizations (NPOs), legal persons, and virtual asset service providers (VASPs) was not assessed during the review.
• Cross-border wire transfers, NPOs, legal persons, and VASPs are vulnerable to TF risks.
• No cases related to TF have been prosecuted in the period under review.

Recommendations

To address these gaps and vulnerabilities, Dominica is recommended to:

• Conduct a comprehensive ML/TF assessment of NPOs, legal persons, and VASPs
• Implement a national CFT policy that continuously assesses the TF threat and identifies requirements for training and professional development of relevant authorities
• Develop policies by those authorities in line with the national CFT policy
• Conduct a sector review of NPOs to inform the country’s assessment of TF risk
• Provide specific training on TF risks and vulnerabilities to supervisors, financial institutions, and designated non-financial businesses and professions (DNFBPs)

Action Required

The Financial Services Unit (FSU) is responsible for implementing the FATF recommendations and conducting the required sector reviews and assessments. The FSU should:

• Complete the comprehensive ML/TF assessment of NPOs, legal persons, and VASPs within the next 12 months
• Conduct a sector review of NPOs within the same timeframe

Conclusion

By addressing these gaps and implementing the recommended actions, Dominica can further strengthen its anti-money laundering and combating the financing of terrorism efforts, protecting its financial system from ML/TF risks and vulnerabilities.