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Dominica Cracks Down on Money Laundering with Stringent Code of Practice

In its ongoing efforts to combat financial crimes, the Commonwealth of Dominica has introduced a rigorous Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Code of Practice.

Objectives

The primary objectives of the code are clear:

• Prevent the misuse of financial systems by criminal organizations
• Protect the integrity of Dominica’s financial sector

To achieve this, entities and professionals operating in Dominica must adhere to a range of key measures.

Financial Intelligence Unit (FIU)

At the heart of the code is the FIU, which serves as the reporting authority for suspicious transactions. Upon receiving a report, the FIU conducts discreet inquiries to ascertain the basis for the suspicion while maintaining confidentiality. This ensures that investigations are thorough and effective in identifying potential money laundering and terrorist financing activities.

Internal Control Systems

Entities and professionals operating in Dominica must also establish internal control systems to prevent financial crimes. These systems include:

• Written policies, processes, and procedures
• Effective risk assessments
• Designation of individuals responsible for managing AML/ CFT compliance
• Implementation of anti-money laundering and terrorist financing compliance functions

Financial Services Unit (FSU)

The FSU is responsible for monitoring compliance with the code and other relevant legislation. This includes:

• Conducting on-site and off-site inspections
• Assessing internal procedures and risk management policies
• Reporting identified weaknesses and recommending remedial actions
• Imposing penalties in cases of non-compliance

Training

Training is a vital component of the code, with the FSU expected to develop a system of education for practitioners and train inspecting staff to assess the quality of internal procedures, customer risk assessments, and junior staff level of understanding.

Customer Due Diligence

Entities and professionals must also establish customer due diligence measures, including:

• Establishing customer identity
• Verifying sources of funds
• Maintaining records for a minimum retention period
• Adhering to verification requirements for:
  • Politically exposed persons
  • Trusts
  • Shell banks
  • Correspondent banking relationships
  • Wire transfers
  • Non-face-to-face business relationships

Conclusion

In conclusion, Dominica’s AML/ CFT Code of Practice is a significant step forward in the fight against financial crimes. By implementing these measures, the country is demonstrating its commitment to protecting the integrity of its financial sector and preventing the misuse of financial systems by criminal organizations. As such, it is essential that entities and professionals operating in Dominica understand their obligations under the code and take all necessary steps to ensure compliance.