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Money Services Businesses (MSBs) in Dominica

Money Services Businesses (MSBs) in Dominica

Money Services Businesses (MSBs) in Dominica refer to licensed non-bank financial institutions that facilitate essential transactions such as remittances, currency exchange, and cheque cashing. These entities operate under clear legal oversight, playing a key role in the country’s financial infrastructure and cross-border economic linkages.

Legal and Institutional Oversight

The operations of MSBs are governed by the Money Services Business Act No. 8 of 2010. This law requires all MSBs to be licensed through the Financial Services Unit (FSU), which functions under the Ministry of Finance. The FSU is tasked with regulating, supervising, and enforcing financial standards in the sector.

Applicants must submit extensive documentation including proof of incorporation, financial projections, governance structures, and an AML/CFT compliance program. The FSU reviews these applications thoroughly, granting licenses only when all statutory conditions are satisfied.

Regulatory Standards and Compliance

Once licensed, MSBs must maintain a sound financial position, including a minimum paid-up capital and audited financial statements. Businesses are also required to retain client and transaction records for at least seven years and implement strong anti-money laundering and counter-financing of terrorism (AML/CFT) controls.

Compliance is monitored through both off-site reporting and on-site inspections. The FSU works closely with the Financial Intelligence Unit (FIU) to investigate suspicious activities and uphold international reporting standards.

Sector Importance and Risk Monitoring

Money services businesses support thousands of individuals who depend on remittances and informal financial transfers. The system also allows small enterprises to access foreign exchange and financial liquidity in the absence of banking services. These institutions provide access to finance in both urban and remote communities.

To maintain public trust and economic stability, enforcement measures are strictly implemented. Non-compliant MSBs face suspension or license revocation, with such actions published in the Official Gazette of the Commonwealth of Dominica. For example, a revocation notice issued on March 20, 2025, confirmed the FSU’s refusal to renew a Class E license after compliance failures.

Key Areas of Regulation

  • Licensing: Entities must register with the FSU and pass fit-and-proper tests for directors and managers.
  • Supervision: Regular audits and reporting keep institutions accountable to national and international standards.

Evolving with Technology

In response to the global growth of financial technology, Dominica has begun applying MSB-related rules to Virtual Asset Service Providers (VASPs). This move ensures that cryptocurrency exchanges and wallet providers adhere to AML/CFT regulations similar to those imposed on traditional MSBs.

Digital reporting and real-time transaction monitoring have also been introduced. These updates reflect the FSU’s commitment to transparency, modern regulation, and consumer protection. In recognition of its leadership, the FSU received the 2024 Caribbean Financial Regulatory Authority of the Year Award.