Dominican Republic Falls Short on Combating Financial Crime

The Dominican Republic has failed to meet global standards for combating financial crime, according to a recent assessment by the Financial Action Task Force (FATF). The country’s Mutual Evaluation report reveals significant shortcomings in key areas, including risk assessment, coordination and cooperation, money laundering offence, confiscation and provisional measures, and targeted financial sanctions.

Assessing Risk: A Major Weakness

The FATF evaluation found that the Dominican Republic failed to adequately assess its risks and implement effective measures to mitigate them. This is a critical area of concern, as risk assessment is essential for preventing financial crime.

• The country lacks a comprehensive risk assessment framework
• There are no clear guidelines for identifying high-risk areas or activities
• Risk-based approach is not applied effectively

Coordination and Cooperation: Room for Improvement

The Dominican Republic’s national cooperation and coordination mechanisms were found wanting. While there are laws in place, they are not effectively enforced, and there is a lack of coordination between different agencies responsible for combating financial crime.

• Laws and regulations are not consistently enforced
• There is no effective coordination between agencies
• Lack of communication and information sharing

Money Laundering Offence: A Critical Area

The country’s laws do not provide sufficient sanctions or penalties for individuals convicted of money laundering, making it difficult to deter such activities.

• Insufficient sanctions and penalties for money laundering
• No clear guidelines for asset confiscation
• Limited resources for investigating and prosecuting money laundering cases

Confiscation and Provisional Measures: Insufficient

The report highlights issues with confiscation and provisional measures. While the country has made some progress in this area, more needs to be done to ensure that assets are effectively frozen and confiscated from individuals involved in financial crime.

• Limited resources for asset freezing and confiscation
• No clear guidelines for provisional measures
• Lack of coordination between agencies

Targeted Financial Sanctions: A Partially Compliant Area

In contrast, the Dominican Republic demonstrated a higher level of compliance with targeted financial sanctions related to terrorism and terrorist financing. However, this area remains partially compliant due to some limitations in the country’s regulations and procedures.

• Regulations and procedures are not fully effective
• Limited resources for enforcing sanctions
• No clear guidelines for identifying high-risk individuals or entities

The FATF has recommended that the Dominican Republic take immediate action to address these shortcomings and ensure a higher level of compliance with international standards.