Financial Crime World

Risk-Based Approach to Compliance in the Dominican Republic

The Dominican Republic has implemented a robust anti-money laundering (AML) and combating the financing of terrorism (CFT) framework, with a focus on risk-based compliance.

Competent Authorities

The following government agencies are considered competent authorities in the Dominican Republic:

  • Public Ministry
  • Financial Analysis Unit (UAF), attached as a unit of the Ministry of Finance
  • National Directorate for Drug Control
  • Monetary Board
  • General Directorate of Internal Taxes
  • General Directorate of Customs
  • Directorate of Casinos and Gaming
  • Cooperative Development and Credit Institute
  • Superintendents: Insurance, Banks, Securities, Pension Fund, Private Security

Any authority with regulatory or supervisory power, or an activity or economic sector subject to AML/CFT law, is also considered a competent authority.

Financial Analysis Unit (UAF)

The UAF is an autonomous entity that serves as the technical secretary of the National Committee against Money Laundering and Terrorism Financing. Its primary task is to analyze, identify, and submit financial analysis reports to the Public Ministry regarding possible infractions of money laundering, previous infractions, and the financing of terrorism.

Compliance with AML/CFT Regulations

Financial and non-financial regulated entities in the Dominican Republic must constantly evaluate and intensify their compliance efforts against money laundering and terrorist financing activities. To comply with AML/CFT regulations, all regulated parties should adopt a risk-based approach to compliance, with policies and procedures that include:

1. Evaluation of Money Laundering and Terrorist Financing Risks

  • Identify potential risks and assess the likelihood and impact of money laundering and terrorist financing activities
  • Develop strategies to mitigate or manage identified risks

2. Capability to Manage and Mitigate Risk

  • Establish clear policies, procedures, and controls to prevent, detect, and report suspicious transactions
  • Ensure that all employees understand their roles and responsibilities in preventing money laundering and terrorist financing

3. Client Due Diligence or Enhanced Due Diligence

  • Conduct thorough client due diligence to verify the identity of customers and assess their risk profile
  • Perform enhanced due diligence on high-risk customers, such as those from countries with high risk profiles or individuals who have been identified as having a higher risk profile

4. Continued Monitoring

  • Regularly review customer activity and transactions to identify potential suspicious behavior
  • Monitor for unusual patterns of transactions or activities that may indicate money laundering or terrorist financing

5. Maintenance of Transaction Registries

  • Keep accurate records of all financial transactions, including those that are suspicious or have been reported to the Financial Analysis Unit
  • Ensure that transaction registries are easily accessible and can be provided to regulators upon request

6. Designation of a Compliance Officer with Determined Functions and Responsibilities

  • Appoint a compliance officer who is responsible for ensuring that the organization’s AML/CFT policies and procedures are implemented effectively
  • Ensure that the compliance officer has the necessary authority, resources, and support to perform their duties

7. Reporting Unusual Transactions to the Financial Analysis Unit

  • Report all suspicious transactions to the UAF within five business days after the transaction occurred or was attempted
  • Provide detailed information about the transaction, including the date, time, amount, and parties involved.

AML/CTF Reporting Obligations

In the Dominican Republic, regulated entities must report suspicious operations to the UAF within five business days after the transaction occurred or was attempted. Suspicious operations are defined as those transactions carried out or not, complex, unusual, significant, and all patterns of unusual transactions or non-significant but periodic transactions that do not have an obvious economic or legal basis, or that generate a suspicion of being involved in money laundering, some preceding offense, or in the financing of terrorism.