Financial Crime World

Money Laundering (Prevention) Regulations, S.R.O. 4, 2013

Overview

The Money Laundering (Prevention) Regulations, S.R.O. 4, 2013 is a set of regulations that outline the requirements for preventing money laundering in Dominica. The key points of these regulations are outlined below.

General Obligations

  • Customer Identification: A person carrying on a relevant business must identify and verify the identity of their customers.
  • Maintaining Identification Procedures: Identification procedures must be maintained by a person carrying on a relevant business.
  • Exemptions for Financial Institutions: Evidence of identity is not required if the customer is a financial institution or has already produced satisfactory evidence of identity.

Identification Procedures

  • Establishing Customer Identity: A person carrying on a relevant business must establish the true identity of each account holder and verify the nature of their business, source of funds, and beneficiaries.
  • Verifying Principal’s Identity: In cases where an applicant for business is acting on behalf of another person, the person carrying on the relevant business must establish the true identity of the principal.
  • Exemptions for Financial Institutions: Identification procedures do not require any steps to be taken if there are reasonable grounds for believing that the applicant is a financial institution.

Exemptions

  • Satisfactory Evidence of Identity: Evidence of identity is not required in certain circumstances, such as when dealing with a customer who has already produced satisfactory evidence of identity or when conducting transactions in respect of which the customer has been licensed or registered.
  • Risk Management Systems: A person carrying on a relevant business may put appropriate risk management systems in place to determine if a customer or beneficial owner is a politically exposed person.

Cross-Border Correspondent Banking

  • Adequate Identification and Verification: A bank must adequately identify and verify respondent institutions with whom it conducts cross-border correspondent banking relationships.
  • Assessing Anti-Money Laundering Controls: The bank must gather sufficient information about the nature of the business, determine the reputation of the person or entity, and assess their anti-money laundering controls.

Conclusion

These regulations aim to prevent money laundering by requiring persons carrying on a relevant business to identify and verify their customers’ identities, establish the true identity of principals, and put in place risk management systems to detect politically exposed persons.