Law against Money Laundering and Financing of Terrorism

by | Oct 17, 2018 | News

Law No. 155-17 against Money Laundering and Financing of Terrorism, was enacted on May 31, 2017, which changed considerably the money laundering prevention in the Dominican Republic. 

The enactment of this law responded to the Dominican Republic incorporation to the Latin American Financial Action Task Force (GAFILAT) in 2016, one of the 9 regional bodies of the FATF. It was required to restructure and amend Dominican Republic laws, in particular Law No. 72-02 against Laundering of Assets from Illegal Trafficking in Drugs and Controlled Substances. Now the Dominican Republic has an enhanced regulatory framework in terms of money laundering that not only considers drug trafficking as a single previous offense.

We will mention below some of the novelties of the money laundering law:

  1. The classification of obligated subjects (in financial and non-financial sectors), the delimitation of those persons, and the activities considered to be non-financial subjects, such as casinos, factoring companies, real estate agents when they participate in buying and selling real estate, jewelry merchants, companies and legal professionals to include lawyers, notaries, accountants, car dealers, seller of firearms, vessels and aircrafts, pawnshop and construction companies). The law also created the supervisory body of such non-financial subjects, the Tax Administration (DGII). It should be noted that these subjects must comply in due diligence and monitoring of their clients based on risks, in addition to designating a compliance officer within the company for these purposes.
  2. The inclusion of more than 20 preceding or decisive offences for the crime of money laundering, in addition to drug trafficking, such as: human trafficking, child pornography, pimping, human organs trafficking, illicit arms trafficking, kidnapping, extortion, counterfeiting of coins, securities, fraud against the State, embezzlement, concussion, bribery, trafficking of influences, prevarication and crimes committed by public officials in its functions, transnational bribery, tax offence, smuggling, piracy, offences against the intellectual property, unjustified enrichment, falsification of public documents, counterfeiting and adulteration of medicines, food and beverages, illicit traffic in goods, works of art, jewelry and sculptures, and aggravated robbery, crime financing, crimes and high-tech crime, misuse of  confidential information or privileged, market manipulation, among others.
  3. The law included the crime of financing terrorism due to the growing terrorist attacks and the proliferation of weapons of mass destruction.
  4. The inclusion of the PEP (Politically Exposed Persons) as high risk, being those officials who perform or have performed public functions during the last 3 years.
  5. It requires the disclosure of the final beneficiary of legal persons.