Dominica’s Fight Against Financial Crime: A Mixed Bag

A recent assessment by international experts has revealed that Dominica’s efforts to combat financial crime are showing mixed results. While the island nation has made progress in some areas, there is room for improvement in others.

Dissemination of Information and Strategic Analysis

The Financial Intelligence Unit (FIU) can improve its dissemination of information, which triggers money laundering (ML) investigations. Additionally, the FIU’s strategic analysis does not fully reflect all higher-risk areas identified in the National Risk Assessment (NRA).

Investigations and Prosecutions

Dominica has demonstrated instances of ML investigations and prosecutions, but the number of convictions is not commensurate with its risk profile. The country takes a reactive approach to identifying ML, which may not be detecting complex cases involving professional networks or cash smuggling.

Confiscation of Criminal Proceeds

The confiscation of criminal proceeds is a policy objective in Dominica, but the system for cross-border movements of cash or bulk cash transactions (BNIs) is not being effectively enforced. Only a low proportion of non-declared or falsely declared cash or BNIs are confiscated.

Terrorist Financing

Dominica has a strong legal framework for terrorist financing (TF), but its risk assessment did not consider several TF vulnerabilities. The country has not prosecuted any TF cases in the period under review and has not convicted anyone for TF-related offenses. This raises concerns about the effectiveness of sanctions and the lack of measures to disrupt TF.

National Counter-Terrorism Financing Policy

The report highlights that Dominican authorities have not implemented a national counter-terrorism financing policy, which would assess the TF threat and identify requirements for training and professional development of financial intelligence units (CAs).

Implementation of UN Security Council Resolutions

Dominica has updated its legal framework and developed Central Authority procedures in accordance with UN Security Council Resolution 1267 and 1373 on terrorist financing. However, these procedures do not accurately distinguish between the two resolutions, and the freeze-without-delay mechanism is deficient.

Training and Guidance

The Financial Services Unit (FSU) has provided training to regulated entities to raise awareness of TF requirements in the St. Lucia Financial Task Force Agreement (SFTA), but has not issued guidance on TF obligations for financial institutions or designated non-financial businesses and professions (DNFBPs).

Conclusion

While Dominica has made progress, there is still much work to be done to improve its fight against financial crime. The report concludes that the country needs to address these weaknesses in order to effectively combat financial crime and protect its economy.