Dominica and “all major Caribbean and Central American countries” have been listed as “Major Money Laundering Jurisdictions”.
That’s according to the latest US International Narcotics Control Strategy Report (INCSR) – Volume Two, dedicated to money laundering – for the year 2018.
The offending countries – listed in alphabetical order – have been identified as follows: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Colombia, Costa Rica, Cuba, Curacao, Dominica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, St. Maarten, Suriname, Trinidad and Tobago, and Venezuela.
However, the INCSR points out that despite the devastation of Hurricane Maria, Dominica made some progress in its Anti-Money-Laundering or AML regime in 2018.
The report states that with the assistance of a donor, Dominica has begun a National Risk Assessment (NRA).
“Dominica reports there are currently 13 offshore banks regulated by the Financial Services Unit (FSU), which also licenses and supervises credit unions, insurance companies, internet gaming companies, and the country’s economic citizenship program,” the report says.
According to the report, the government of Dominica indicated early on that narcotics and cyber crime are the major sources of illicit funds.
“The country’s geographical location and porous borders raise risks for narcotics trafficking,” the report states.
Additionally, foreign nationals from Europe, South America, and Asia have used automated teller machines in Dominica to skim money from European bank accounts by exploiting security deficiencies.
“The preliminary vulnerabilities identified by the NRA are inadequate AML training for the judiciary and the prosecutorial authorities, lack of awareness of new AML/CFT procedures by key law enforcement agencies, and ineffective supervision of DNFBPs,” it stated.
The report is accusing Dominica of not consistently using available regional mechanisms, such as the Joint Regional Communications Center (JRCC), to properly vet candidates under its Citizenship by Investment Programme (CIP).
It said the Citizenship by Investment Unit (CBIU) does not always deny citizenship to those who are red flagged or given negative dispositions from the JRCC and other institutions.
“There are also increasing concerns about the expansion of these programs due to the visa-free travel and the ability to open bank accounts accorded these individuals,” the report stated.
The INCSR also pointed out that the only Caribbean/Central American countries left off this year’s INCSR are the US Virgin Islands and Puerto Rico – both US protectorates – along with Martinique, Guadeloupe and French Guiana, all overseas departments of France.
The US even added itself to the list of major money laundering jurisdictions along with the United Kingdom, Spain and The Netherlands – all founding members of the Organization for Economic Co-operation and Development (OECD) – which works closely . . . with the European Union (EU) on tax-avoidance issues and creates the “Tax Haven Blacklist” that seeks to name and shame and then penalize countries it determines are tax havens and money laundering centers.
The US is a founding member of the Financial Action Task Force (FATF), the international financial crimes watchdog that also works in conjunction with the OECD on tax avoidance and tax-fraud-related matters.