The Dominican Republic has taken a significant step towards fortifying its financial and security sectors by implementing Law No. 155-17. This pivotal legislation aligns the nation with international standards, reinforcing its commitment to thwarting money laundering and the financing of terrorism. Law No. 155-17 offers a comprehensive framework that defines key terms, sets out criminal liabilities and administrative measures, and promotes international cooperation. It mandates both financial and non-financial entities to comply with its rigorous stipulations in the battle against illegal activities.

The primary objective of this law is to obstruct attempts to legitimize unlawfully acquired assets and stifle the funding of terrorist organizations. An in-depth understanding of its core principles, particularly with regards to real estate transactions and money transfers, is imperative for all stakeholders.

HISTORICAL CONTEXT:

Back in 2002, the Dominican Republic passed Law No. 72-02, aiming to adhere to global standards in the prevention of money laundering. However, this law exhibited deficiencies, especially in terms of handling illicitly acquired assets. In June 2017, it was supplanted by the more contemporary and all-encompassing Law No. 155-17, which also accounts for the financing of terrorism.

This legislative update was a direct response to the enhanced recommendations of the Financial Action Task Force on Money Laundering (FATF), an intergovernmental body. It specifically addresses not only money laundering but also the pressing issue of terrorist financing, which has gained global prominence in recent years.

KEY PROVISIONS:

Law No. 155-17 meticulously defines money laundering as the art of concealing or utilizing assets obtained through illegal means. It also outlines the penalties for criminal offenses associated with money laundering, including the insufficient provision of information, or reporting by obligated parties.

Terrorist financing is elucidated as providing, collecting, financing, or facilitating the sale of goods or services to terrorist organizations, even without a direct link to terrorist acts. Furthermore, traveling abroad with the intent to commit or support terrorism is considered a breach of the law.

It’s imperative to acknowledge that both money laundering and terrorist financing can incur penalties, even if the underlying criminal activities transpired in another jurisdiction.

OBLIGATED PARTIES:

The law categorizes obligated parties into two broad categories: financial and non-financial organizations. Financial institutions encompass banks, securities intermediaries, and other entities, while non-financial organizations include professionals like real estate agents, lawyers, casinos, and car dealers engaged in specific commercial activities. These entities are mandated to develop compliance programs, conduct thorough due diligence, register transactions, report suspicious activities, and screen clients against international watchlists.

ADMINISTRATIVE SANCTIONS:

Legal entities can be held accountable for violations under this law, potentially resulting in financial penalties. The legislation also delineates various penalties contingent on the gravity of the offenses. In cases of severe violations, regulatory authorities are empowered to suspend or revoke licenses from the violators. The heads of obligated organizations may also be held personally responsible for their organization’s actions.

REGULATORY AUTHORITIES:

The central regulatory bodies include the Committee for Combating Money Laundering and Terrorist Financing, the Financial Analysis Unit (UAF), and supervisory authorities overseeing obligated parties.

International Cooperation: Law No. 155-17 actively encourages international cooperation. This encompasses recognizing court decisions from other countries, extraditing individuals for money laundering and terrorist financing-related offenses, as well as fostering collaboration with international organizations.

Precautionary Measures and Confiscation: When investigating crimes, the law authorizes the seizure, confiscation, or freezing of movable property, bank assets, or real estate transactions to preserve assets. Asset forfeiture can also occur post-conviction, and the confiscated assets may be sold to compensate for damages.

CONCLUSION:

Given the intricate nature of this legislation and the provisions, any financial or business transaction in the Dominican Republic, especially large-scale purchases, necessitates a comprehensive due diligence process. This entails exercising due care and scrutinizing all pertinent financial records and documents relevant to the proposed transaction, such as bank account activity, tax returns, employment contracts, and other documents affirming the origin of funds. Adherence to this procedure not only ensures compliance with the law’s requirements but also actively contributes to preventing illicit operations within the Dominican Republic. In sum, Law No. 155-17 embodies the nation’s dedication to upholding international standards and safeguarding its financial system from money laundering and terrorist financing threats.