By Iris Villafaña , Heiddy Moronta and Paola Reinoso
Terrorist financing (TF) is any form of economic action, aid or mediation that provides financial support for the activities of terrorist elements or groups.
The increased focus on the importance of combating terrorist financing comes in the aftermath of the attacks of 11 September 2001 and the growing threat posed by terrorist groups.
In the Dominican Republic, the crime of terrorism is covered by Law No. 267-08 on Terrorism, which creates the National Anti-Terrorism Committee and the National Anti-Terrorism Directorate.
Terrorist financing is framed in Article 5 of Law No. 155-17, which defines it as any direct or indirect means of action, assistance or mediation that facilitates the financing of operational and logistical costs for activities, development and maintenance of terrorist individuals and/or organisations, even in the absence of a direct relationship with a terrorist act.
Differences between Terrorist Financing and Money Laundering
| Money laundering | Terrorist Financing |
| Objective: to legitimise the proceeds of illicit activities to be used in a legitimate way. | Objective: to conceal the movement of funds so that the financing activity goes undetected. Funds will ultimately be transferred to someone linked to terrorism. |
| Motivation: Economic | Motivation: Ideological |
| Volume of Funds: Generally funds under management are high. | Volume of Funds: Generally the operational funds required are lower. |
| Predicate offence: (drug trafficking, extortion, etc.) occurs prior to money laundering. | Predicate offence: (commission of terrorist act) is a future criminal activity, i.e. to be carried out after funding. |
| Risk and case identification is oriented towards law enforcement. | Research is more preventive and intelligence-led. |
Liability of Regulated Entities for money laundering and financing of terrorism
Article 2 of Law 155-17 frames the concept of obliged subject, which is understood to be the natural or legal person who by virtue of this law is obliged to comply with obligations, such as preventing, detecting, evaluating and mitigating the risk of money laundering and terrorist financing and other prevention measures.
Types of regulated entities according to Dominican jurisprudence
The law considers that there are two types of regulated entities, such as financial regulated entities, which would be categorised as financial intermediaries, securities intermediaries, persons involved in currency exchange, among others. And non-financial regulated entities, which are those engaged in other professional, commercial or business activities which by their nature are vulnerable to money laundering and terrorist financing activities, such as lawyers, notaries, accountants, as well as casinos, factoring companies, real estate agents, among others.
Article 34 of Law 155-17 establishes the obligation to implement and adopt a compliance programme for all regulated entities.
For more information on the development of a compliance programme, please contact us at [email protected].
