Money laundering has been utilized in a variety of illicit activities throughout history, including drug trafficking, terrorism, and investment and financial fraud. Moreover, subjects engaging in such activities typically seek out nations with lax regulation and oversight of such activities.
AML in the Dominican Republic
The Dominican Republic has adopted several international treaties and conventions that have assisted governments in cooperating to prohibit people from engaging in these illicit activities on their property.' The Inter-American Convention Against Corruption was signed in 1996, while the United Nations Convention Against Transnational Organized Crime was signed in 2002. On June 7, 2002, the Dominican Republic's Congress adopted the first legislation on the subject, Law 72- 02, which regulated the areas included in the previously stated conventions.
A series of suggestions in 2012 rendered Law 72-02 outdated. These new suggestions were intended to prevent and combat money laundering, terrorism financing, funding for the feed of weapons of mass destruction, and other severe threats to the international financial system.
Following these proposals, the Dominican National Congress began developing new legislation that would serve as a "transparent and helpful weapon in the pursuit of crime." On June 1, 2017, this law was eventually implemented.
As a significant destination for foreign investment in the Caribbean, the Dominican Republic could not afford to have lax monitoring regulations. The country owes it to current and prospective investors to enhance its anti-money laundering procedures in conformity with international norms and actively empower the country itself in this respect. Implementing this new legislation and its rules have highlighted the country's governmental institutions and business framework's new reality.
The "New Law"
On June 1, 2017, the Executive Power of the Dominican Republic promulgated the new Anti-money Laundering and Terrorist Financing Act 155-17 ("New Law") to bring the Dominican legal framework up to speed with new international standards. The New Law replaces the Anti-Money Laundering Act 72-02 of June 7, 2002, with a more sufficient, consistent, and modern legal structure.
The New Law aims to more effectively regulate money laundering and terrorist financing activities in accordance with the most recent international guidelines and comply with international standards for transparency and the transmission of the available information regarding economic agents, their activities, and their beneficial owners. The New Law will most certainly support the Dominican Republic in continuing on its road of international collaboration, access to foreign financing, and assistance from international organizations.
The new law protects the Dominican Republic from being placed on the Financial Action Task Force's (FAFT) 'black list,' which may have hampered foreign investment into the nation and harmed the country's overall economy. It also provided the Dominican government with a mechanism for sanctioning anybody seeking to engage in this type of illegal behavior, protecting the foreign and domestic investment, and ensuring the safety of Dominican individuals in general.
Dominican Republic's AML Regulators
Financiero Analysis Unit (Financial Analysis Unit, or UAF) is the Dominican Republic's main AML regulator. Its primary tasks include receiving, requesting, analyzing, and disclosing to competent authorities reports of suspected financial activities and cash transactions over $10,000, as well as providing technical assistance to other competent authorities.
National Anti-Money Laundering Committee
It was established to promote, coordinate, and recommend policies for the prevention, discovery, and repression of laundered assets. Its primary tasks are as follows:
- Coordination of public and private sector efforts to prevent the use of the economic, financial, and commercial systems for money laundering.
- To advise the Executive Power on any legal and administrative actions required to enhance the existing procedures for preventing and detecting money laundering.
- To keep track of the Committee and the other institutions established by the new law's yearly budgets. The Committee is chaired by the President of the National Drug Council and is made up of the Republic's General Public Attorney, the Minister of Finance, the Superintendent of Banks, and the President of the Drug Control Office.
Custody and Management of Seized Assets Office
This is a branch of the National Committee Against Money Laundering. Its primary function is to safeguard, administer, and sell confiscated assets due to the commission of any of the crimes listed in the law. It has the authority to engage in agreements with private enterprises, both domestic and international, and to handle the confiscated assets.
Other AML regulators of the Dominican Republic are as follows:
- Central Bank of Dominican Republic
- Superintendence of Banks
- National Drug Council
- Secretariat of Finance