Dominica’s journey through the labyrinth of international financial regulation has been anything but smooth. As a small, open economy dependent on external investment flows and global banking connectivity, the country has faced acute vulnerabilities in a rapidly tightening regulatory environment. Yet today, Dominica stands at a crucial pivot point: strengthened compliance mechanisms, renewed policy commitments, and improved international ratings signal a path toward stability and credibility.
However, success is fragile. Global pressures are mounting, and for Dominica, maintaining momentum is not a choice — it is an existential necessity.
A Hard-Earned Reputation After Past Setbacks
Dominica’s experience with global compliance scrutiny has been sobering. Several years ago, the island, like many of its Caribbean neighbors, found itself grappling with de-risking by international banks, a direct result of perceived financial weaknesses. Correspondent banking relationships — the backbone of international trade and finance — became tenuous.
Further, the growth of the Citizenship by Investment (CBI) program, while an essential pillar of revenue generation, drew critical attention from organizations like the European Union and the Financial Action Task Force (FATF), which flagged concerns over beneficial ownership transparency and potential misuse by illicit actors.
Recognizing the gravity of the situation, Dominica undertook reforms. The Financial Services Unit (FSU) initiated rigorous supervisory measures, enhanced its anti-money laundering (AML) protocols, and aligned its practices with international standards. The recent hosting of Dominica’s first-ever Financial Compliance Summit in 2025 stands as a clear declaration: Dominica intends not merely to comply but to lead among small states in regulatory resilience.
The Caribbean Financial Action Task Force’s (CFATF) latest Mutual Evaluation Reports reflect this progress, highlighting measurable improvements in Dominica’s legislative and institutional frameworks. But external observers remain cautious, and challenges persist.
The Stakes Are Higher Than Ever
Dominica’s economy, heavily reliant on CBI revenue and offshore financial services, remains exposed to reputational risks. Global watchdogs, including the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, have intensified scrutiny of jurisdictions perceived to offer “quick pathways” to citizenship or financial incorporation.
In March 2024, the European Parliament called for stricter oversight and possible termination of visa-free access for nationals from countries with aggressive CBI programs unless further safeguards were implemented. Dominica, along with St. Kitts and Nevis and other Caribbean peers, was directly referenced in those discussions.
Failure to maintain robust compliance could have devastating ripple effects: frozen correspondent accounts, impediments to trade and remittances, restricted investment inflows, and amplified barriers for ordinary citizens and businesses operating globally. These risks are not theoretical. Caribbean neighbors such as Antigua and Barbuda and Belize have already suffered significant financial consequences from temporary grey-listing events.
Moving From Reaction to Proactive Strategy
While recent reforms have been promising, the key to Dominica’s sustainable credibility lies in transitioning from reactive fixes to proactive compliance leadership.
Compliance must become embedded into the DNA of public sector governance and private sector operations. Financial institutions, real estate agents, legal firms, insurance companies, and service providers must all internalise compliance as integral to business survival, not an optional burden. Government agencies must modernize legacy processes that hinder transparency, such as slow company registry updates or opaque procurement practices.
Education remains vital. Regulators must actively support private sector training to ensure uniformity in standards, reporting mechanisms, and client verification procedures. Compliance must no longer be seen as the exclusive domain of banks; it is the collective responsibility of an entire economic ecosystem.
During the recent Compliance Summit, Financial Services Unit Director Claudius Lestrade emphasized that the country must treat regulatory credibility as a “currency as important as the Eastern Caribbean dollar.” His remarks capture the heart of the issue: reputation now moves markets.
Dominica’s proactive stance should also extend to regional cooperation. Engagements with organizations like the Caribbean Financial Action Task Force (CFATF) and the Eastern Caribbean Central Bank (ECCB) must not only continue but deepen. Strategic regional alliances can offer critical technical support, shared intelligence, and a collective voice in international forums where small states often struggle for visibility.
The Role of the CBI Program in the Compliance Equation
One area where Dominica must tread especially carefully is the management of its CBI program. While the program has been a financial lifeline post-Hurricane Maria, it continues to attract external skepticism.
In February 2025, the European Union reaffirmed its demand for increased due diligence standards across all CBI programs globally. Dominica responded by committing to enhanced vetting processes, terminating visa-free travel for citizens who obtained passports through irregular means, and publishing anonymized statistical reports on CBI approvals.
Nonetheless, trust must be earned continuously. The government should consider commissioning independent annual audits of the CBI program’s due diligence systems and publishing public summaries of findings. Visibility, not opacity, is now the best defense against external pressures.
Safeguarding the CBI’s integrity is not merely about preserving revenue — it is about maintaining international access and economic sovereignty.
Dominica’s Next Steps Must Be Relentless
There is no safe plateau. International compliance standards will only grow stricter over the coming years, with emerging threats like cybercrime, environmental crimes, and complex tax avoidance structures demanding even tighter oversight.
Dominica must continue to:
- Modernize and digitize regulatory agencies
- Strengthen financial crime investigation capacity
- Enhance information-sharing mechanisms domestically and regionally
- Deepen ties with international compliance monitoring bodies
- Expand public sector transparency initiatives
There are no shortcuts. Dominica’s survival in the global economy will hinge on vigilance, innovation, and an unrelenting commitment to integrity.
If Dominica sustains the discipline it has demonstrated in recent years — refusing to succumb to short-term temptations or administrative fatigue — it can become a model for small developing economies navigating an increasingly unforgiving international financial order.
Trust, once broken, is arduous to rebuild. But trust, carefully nurtured, can open pathways of prosperity that last generations.
Dominica has fought hard to be taken seriously. Now, it must prove that it deserves to stay on the global stage.
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