Dominica’s Financial System: A Strong Foundation with Room for Improvement

Recent assessment by international experts has highlighted Dominica’s commitment to strengthening its financial system, while also identifying areas that require further attention.

Strengthening the Financial System

The report commends Dominica’s development of a National Policy and Strategy (2019-2024) and National Intelligence Assessment Program (NIAP), which have led to increased coordination and cooperation among authorities. The country has also made significant strides in enhancing its control framework and interdiction efforts.

Areas for Improvement

However, the assessment notes that while Dominica’s financial intelligence unit (FIU) plays a key role in enriching financial intelligence, there is still room for improvement in terms of disseminating information to law enforcement agencies and utilizing strategic analysis to reflect high-risk areas identified in the National Risk Assessment (NRA).

Money Laundering and Terrorist Financing Risks

The report highlights concerns regarding money laundering (ML) and terrorist financing (TF) risks associated with the Citizenship by Investment (CBI) program. While Dominica has a strong legal framework for criminalizing TF, there is a need for more comprehensive assessments of vulnerabilities in sectors such as non-profit organizations, legal persons, and virtual asset service providers.

Lack of Prosecutions and Sanctions

The assessment also notes that authorities in Dominica have not prosecuted any cases related to TF during the review period, and that the effectiveness, dissuasiveness, and proportionality of sanctions could not be assessed due to the absence of convictions for TF.

Recommendations

To address these concerns, the report recommends:

• Developing a national CFT policy to continuously assess the TF threat
• Conducting a comprehensive sector review of non-profit organizations (NPOs) to inform Dominica’s assessment of TF risk
• Implementing targeted outreach, oversight, and training for NPOs
• Enhancing dissemination of financial intelligence to law enforcement agencies
• Utilizing strategic analysis to reflect high-risk areas identified in the National Risk Assessment (NRA)
• Developing a comprehensive approach to preventing money laundering (ML) and terrorist financing (TF)
• Implementing effective measures to disrupt and prosecute cases related to TF

Conclusion

Dominica has made significant progress in strengthening its financial system, but there is still work to be done to address ML and TF risks. The country must continue to prioritize these efforts and implement the recommendations outlined above to ensure a robust and effective financial system that protects against these threats.

Recommendations

1. Develop a national CFT policy to continuously assess the TF threat.
2. Conduct a comprehensive sector review of non-profit organizations (NPOs) to inform Dominica’s assessment of TF risk.
3. Implement targeted outreach, oversight, and training for NPOs.
4. Enhance dissemination of financial intelligence to law enforcement agencies.
5. Utilize strategic analysis to reflect high-risk areas identified in the National Risk Assessment (NRA).
6. Develop a comprehensive approach to preventing money laundering (ML) and terrorist financing (TF).
7. Implement effective measures to disrupt and prosecute cases related to TF.