Dominican Republic’s Financial Institutions Face New Compliance Obligations
The Dominican Republic has implemented a new Anti-Money Laundering and Terrorist Financing Act, aiming to bring the country in line with international standards and prevent money laundering and terrorist financing threats.
Background
In June 2017, the Dominican Republic introduced a new law based on recommendations from the Financial Action Task Force (FATF). The law is welcomed by President Danilo Medina as a step towards improving the country’s access to foreign credit and international organizations.
New Regulations
The Act introduces more stringent regulations around financial transactions, requiring professionals in various industries to conduct due diligence and maintain data transparency. These include:
- Savings and loan cooperatives
- Lotteries and sports betting companies
- Factoring companies
- Pawn houses
- Traders in vehicles, metals, precious stones and jewelry
- Construction companies
- Real estate brokers
- Lawyers
- Notaries
- Accountants
These professionals are now required to:
- Introduce and maintain a compliance program
- Evaluate money laundering and terrorist financing risks
- Manage and mitigate those risks
- Conduct detailed due diligence on clients
- Monitor client activity
- Report suspicious activity to the Financial Analysis Unit within five days of an event
Customer Due Diligence
One of the biggest challenges introduced by the Act is customer due diligence. Professionals are required to:
- Establish and verify the identity of their clients
- Verify the identity of anyone acting on behalf of a client
- Identify the ultimate beneficial owner of a company
- Monitor clients and client activity continuously and regularly update
Compliance Requirements
Meeting the requirements of the Act will require extensive planning, clear policies and procedures, and ongoing training of staff. However, there are excellent automated systems available to help businesses meet their regulatory obligations while keeping costs down.
Implementation Support
The Dominican Republic has already consulted with Accuity on how to implement best practices in financial crime compliance. With the right tools and expertise, it is possible for financial institutions and non-financial professionals in the country to effectively manage risk and comply with the new regulations.
Conclusion
The new Anti-Money Laundering and Terrorist Financing Act aims to improve the Dominican Republic’s reputation on the international financial stage and prevent money laundering and terrorist financing threats. By introducing more stringent regulations, the country is taking steps towards implementing best practices in financial crime compliance. With the right support and resources, businesses can meet their regulatory obligations and manage risk effectively.