Money Laundering Guidelines Issued to Combat Financial Crimes in Dominica
Date: March 10, 2023
KINGSTOWN, DOMINICA -
The government of Dominica has issued guidelines to combat money laundering and terrorist financing in the country. The guidelines, which came into effect on January 1, 2023, aim to prevent the misuse of financial systems for illegal activities.
What is Money Laundering?
Money laundering is a serious crime that involves concealing or disguising the source of illegally obtained funds to make them appear legitimate. This can be done by creating complex layers of financial transactions designed to obscure their origin and hamper investigation.
Key Aspects of Money Laundering
- Layering: Separating the proceeds of crime from their source by creating sometimes complex layers of financial transactions designed to mask their origin, obscure the audit trail, and thus hamper the investigation, reconstruction, and tracing of proceeds.
- Integration: Placing the laundered proceeds back into the economy as apparently legitimate business funds.
How Money Laundering Works
Money laundering can be achieved through: + International wire transfers using nominees or shell companies + Moving in and out of investment schemes + Repaying credit from the direct or indirect proceeds of crime + Realizing property or legitimate business assets + Reducing shares or units in collective investment schemes acquired with criminal proceeds + Switching between forms of investment + Surrendering paid-up insurance policies
Financial Institutions at Risk
Financial institutions dealing directly with the public, such as: + Banks + Venture capital firms + Money transmission services + Issuing and administering means of payment + Guarantees and commitments + Trading in money market instruments + Foreign exchange services
are particularly at risk of being involved in money laundering.
Relevant Financial Transactions
A relevant financial transaction is defined as any arrangement between two or more parties that involves the provision of these services. The guidelines will apply to such transactions when: + At least one party is acting in the course of business + A business relationship is formed to facilitate frequent, habitual, or regular transactions
Legislation and Offences
The legislation specifically relating to money laundering is contained in the Money Laundering Prevention Act and the Proceeds of Crime Act. Offences under these acts include: + Concealing, disguising, or facilitating the concealment or disguise of the source of illegally obtained funds
Requirements for Financial Institutions
Financial institutions are required to: + Exercise care and diligence in assessing whether or not they apply to business undertaken + Verify identity + Report suspicious transactions in accordance with the guidelines
Conclusion
The money laundering guidelines issued by the government of Dominica aim to prevent the misuse of financial systems for illegal activities and ensure that financial institutions comply with anti-money laundering regulations.