Money Laundering Prevention Act of Dominica

Money Laundering Prevention Act of Dominica is the principal legislation addressing anti-money laundering (AML) in the country. Originally enacted as Act No. 20 of 2000 and comprehensively revised by Act No. 8 of 2011, it aligns Dominica’s financial system with international standards such as those of the Financial Action Task Force (FATF) and the Caribbean Financial Action Task Force (CFATF).

Money Laundering Prevention Act: History and Scope

The Act first came into force in 2000, establishing criminal offenses for money laundering and creating a supervisory framework. In 2011, a new Act modernized definitions, expanded compliance requirements, and reinforced the authority of supervisory bodies. Subsequent regulations, such as the Money Laundering Prevention Regulations SRO 4 of 2013, and amendments in 2013 and 2022, refined reporting obligations, internal controls, and customer due diligence requirements.

Historical Timeline

• 2000: Money Laundering Prevention Act passed, gazetted January 2001; initial framework established.
• 2011: Act No. 8 of 2011 replaces and modernizes the regime.
• 2013: SRO 4 of 2013 issues detailed regulations on systems, training, CDD, and reporting.
• 2016 and 2020: Further amendments and proceeds-of-crime updates reinforce confiscation, supervision, and compliance.

The Act interacts with other national instruments including the Money Services Business Act No. 8 of 2010, the Proceeds of Crime Act, and governance structures such as the Chambers of the Attorney General, the Financial Intelligence Unit (FIU), and the Financial Services Unit (FSU). These linkages strengthen Dominica’s overall financial regulatory system, as reflected in the Official Gazette of Dominica and the country’s Statutory Rules and Orders (SRO).

Objectives of the Act

The primary objectives of the Money Laundering Prevention Act are to:

• Prevent and detect money laundering in Dominica.
• Provide for freezing, confiscation, and forfeiture of property linked to unlawful activity.
• Establish supervisory bodies and investigative powers to enforce compliance.
• Promote transparency, particularly in beneficial ownership and financial reporting.
• Enhance cooperation with regional and international partners in combating financial crime.

Key Rules and Provisions

The Act and its regulations impose wide-ranging obligations on financial institutions and designated non-financial businesses:

• Money Laundering Offenses – Criminalizes the act of laundering proceeds of crime, assisting, or concealing illicit property.
• Suspicious Transaction Reporting (STRs) – Requires immediate reporting of suspicious transactions to the FIU.
• Know Your Customer (KYC) & Due Diligence – Establishes customer identification rules, enhanced due diligence for high-risk cases, and ongoing monitoring.
• Record Keeping – Mandates retention of client and transaction records for inspection.
• Prohibition on Tipping Off – Criminalizes disclosure to suspects of money laundering investigations.
• Supervisory Authority – Grants powers to supervisory bodies to inspect, sanction, suspend, or revoke licenses for non-compliance.
• Freezing and Confiscation Orders – Provides courts with authority to freeze and seize assets connected to offenses.
• Asset Tracking and Monitoring – Enables injunctions and monitoring orders for property linked to unlawful activities.
• International Cooperation – Allows assistance to foreign states and integration with extradition processes for transnational financial crimes.
• Protection for Reporting Entities – Protects entities and individuals from liability when fulfilling STR obligations.

Institutional Role and Regional Significance

The Financial Intelligence Unit (FIU) leads AML enforcement, while the Financial Services Unit (FSU) oversees compliance in banks, credit unions, money service businesses, and insurance companies. Coordination with the Inland Revenue Division (IRD), the High Court of Justice, and international regulators reinforces Dominica’s credibility in financial governance.

Dominica’s AML framework is periodically reviewed by the CFATF, with the 2023 Mutual Evaluation Report identifying progress in compliance and areas needing improvement. This ongoing evaluation process reflects the country’s effort to strengthen resilience against financial crime and maintain investor confidence.