Financial Crime World

Preventing Money Laundering: A Guide for Financial Services Providers

Introduction

Money laundering is a significant concern for financial services providers, as it can have serious consequences for individuals, businesses, and the global economy. In this guide, we will outline the key principles and guidelines for preventing money laundering in Dominica.

Scope of Application

The guidelines outlined in this guide apply to various financial services, including:

  • Banking Business: Providing banking services, such as accepting deposits, making loans, and facilitating transactions.
  • Venture Risk Capital: Investing in businesses or ventures that carry a high level of risk.
  • Money Transmission Services: Transmitting funds on behalf of customers, either domestically or internationally.
  • Issuing and Administering Means of Payment: Issuing payment cards, such as credit or debit cards, and administering the payment systems for merchants.
  • Guarantees and Commitments: Providing guarantees or commitments to customers, such as letters of credit or performance bonds.
  • Trading for Own Account or for Account of Customers: Engaging in trading activities on behalf of oneself or customers.
  • Money Broking: Facilitating the buying and selling of securities or other financial instruments.
  • Money Lending and Pawning: Providing loans to customers or accepting collateral as security for loans.

When do the Guidelines Apply?

The guidelines apply in the following situations:

  • When at least one party is acting in the course of business.
  • When forming a “business relationship” with frequent, habitual, or regular transactions.

Assessing Transactions

Financial services providers must exercise care and diligence when assessing whether the guidelines apply to business undertaken. This includes considering the following factors:

  • The nature of the transaction
  • The parties involved
  • The frequency, habit, or regularity of the transaction

Legislation Relating to Money Laundering

In Dominica, money laundering is governed by the following legislation:

  • Money Laundering Prevention Act (No 8 of 2011): Contains specific offenses related to money laundering.
  • Proceeds of Crime Act (No 4 of 1993): Provides for the confiscation of proceeds of crime and the freezing of assets.

Key Points

Here are some key points from this guide:

  • The guidelines apply to financial services providers who provide various services such as banking, venture risk capital, money transmission, issuing means of payment, and others.
  • Isolated transactions should be treated as any other transaction, but identity verification and reporting may be required if money laundering is suspected.
  • The legislation specifically relating to money laundering includes offenses contained in the Money Laundering Prevention Act (No 8 of 2011) and the Proceeds of Crime Act (No 4 of 1993).