FATF Status

CFATF Statement re AML Strategic Deficiencies: November 20th, 2013

In November 2011 the CFATF brought to the attention of its Members certain jurisdictions including Dominica with significant strategic deficiencies in its AML/CFT regime. With a view to encouraging expeditious rectification of the identified strategic deficiencies Dominica and the CFATF developed an Action Plan with identified target dates to address the strategic deficiencies that existed in Dominica’s national architecture to combat money laundering and the financing of terrorism.

The CFATF issued a public statement in May 2013 recommending that Dominica enact legislation and issue relevant guidelines addressing their AML/CFT deficiencies. Dominica has since brought into force significant mechanisms to address its AML/CFT deficiencies. Dominica and the CFATF should continue to work together to ensure that Dominica’s reform process is completed.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Dominica was undertaken in 2023. According to that Evaluation, Dominica was deemed Compliant for 16 and Largely Compliant for 17 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Overview

The Commonwealth of Dominica’s rugged coastline, resource constraints, and proximity to the French territories of Martinique and Guadeloupe make it a transshipment point for illegal drugs, cash, and contraband, which enter the country by sea.  Dominica is reliant on an economic citizenship program that accepts large numbers of applicants

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           56

World Governance Indicator – Control of Corruption             69

The Commonwealth of Dominica (Dominica) is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU).  The Government of Dominica strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.  Dominica remains vulnerable to external shocks such as climate change impacts, natural hazards, and global economic downturns.  According to Eastern Caribbean Central Bank (ECCB) figures, the economy of Dominica had an estimated GDP of $612.0 million (1,652.5 million Eastern Caribbean dollars) in 2022. Like most of the Eastern Caribbean, the country continues to grapple with the fall-out of the COVID-19 pandemic, supply-chain issues and rising food and fuel prices associated with Russia’s war on-Ukraine. As of May 2023, the International Monetary Fund (IMF) forecast that the economy will grow by 4.9% in 2023.

Reconstruction efforts continue from the devastation caused by Hurricane Maria in 2017.  Losses from Hurricane Maria were estimated at $1.37 billion or 226 percent of GDP.  The efforts were delayed by the Covid-19 pandemic however the government has recently restarted infrastructural projects in housing and tourism. The Government of Dominica is also placing impetus on the modernization and expansion of the agricultural sector ad enhanced food security efforts.

Through its economic policies, the government is seeking to stimulate sustainable and climate-resilient economic growth by implementing a revised macroeconomic framework that includes strengthening the nation’s fiscal framework.  The government states it is committed to creating a vibrant business climate to attract more foreign investment.

Dominica remains a small emerging market in the Eastern Caribbean, with investment opportunities mainly in the service sector, particularly in eco-tourism, information and communication technologies, and education.  Other opportunities exist in alternative energy, including geothermal energy, and capital works, due to reconstruction and new tourism projects.

The government provides some investment incentives for businesses that are considering establishing operations in Dominica, encouraging both domestic and foreign private investment.  Foreign investors can repatriate all profits and dividends and can import capital. Dominica’s legal system is based on British common law.  It does not have a bilateral investment treaty with the United States, though it does have bilateral investment treaties with Germany and the UK.

In 2018, the Government of Dominica signed an Intergovernmental Agreement to implement the U.S. Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Dominica to report the banking information of U.S. citizens.

Country Links

Financial Service Unit of the Commonwealth of Dominica

Financial Intelligence Unit Dominica (FIU-Dominica)

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