Dominica’s Fight Against Money Laundering and Terrorist Financing Under Scrutiny

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A recent report has raised concerns about Dominica’s efforts to combat money laundering (ML) and terrorist financing (TF), citing a lack of sufficient feedback on the quality of its disseminations.

Insufficient Feedback on Disseminations

According to the report, while ML investigations are triggered by disseminations from the Analytical Department, the number of these disseminations can be improved. Additionally, the Financial Intelligence Unit (FIU) conducts strategic analysis but does not sufficiently reflect all higher-risk areas identified in the National Risk Assessment (NRA).

Reactive Approach to Money Laundering Investigations

The report highlights that Dominica has demonstrated instances of ML investigations and prosecutions, but the extent is not fully commensurate with its risk profile. The country’s approach to identifying ML cases is reactive rather than proactive, and it is unclear whether professional ML networks, cash smuggling, complex ML cases, or those involving legal persons are being detected.

Terrorist Financing Concerns

In terms of TF, the report notes that Dominica has a strong legal framework for criminalizing TF, but its NRA did not consider several vulnerabilities. The country’s authorities have not prosecuted any TF cases in the period under review, and there is a lack of convictions to assess the effectiveness of sanctions.

Deficiencies in Terrorist Financing Sanctions (TFS) Regime

The report also raises concerns about the implementation of the TFS regime, citing deficiencies in the Central Authority procedures and a lack of guidance provided by the Financial Services Unit (FSU) to regulated entities on their obligations under TFS.

Recommendations for Improvement

While Dominica has updated its legal framework required by United Nations Security Council Resolutions 1267 and 1373 and developed Central Authority procedures, there is still much work to be done to effectively combat ML and TF. The report calls for improved feedback mechanisms to ensure that the FIU’s disseminations are effective in detecting and disrupting ML and TF activities.

Key Recommendations

• Improve risk assessment processes
• Enhance investigative capabilities
• Provide more guidance to regulated entities on their obligations under TFS

Conclusion

Overall, the report highlights the need for Dominica to strengthen its efforts to combat ML and TF. By implementing these recommendations, the country can improve its ability to detect and disrupt ML and TF activities, and ensure a safer financial system for all.