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Dominica - Corruption

The Commonwealth of Dominica, a small Eastern Caribbean island with a population of just over 70,000, has seen its murder rate climb significantly since 2000. The country serves as a drug transhipment point and produces marijuana primarily to serve the local drug market.

Though there is no established presence of international organised criminal groups, statistics indicate that drug trafficking through the country’s territory may be increasing and domestic street-gangs are a problem. The justice and security sectors suffer from under resourcing and inefficiency, but corruption rates appear to be low in the country. Arguably the most serious problem is a severe backlog of cases in the justice system.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. According to civil society sources and members of the political opposition, officials sometimes engaged in corrupt practices with impunity, but there were no documented cases during the year.

The DPP is responsible for prosecuting corruption offenses, but it lacked adequate personnel and resources for complicated money laundering and public corruption cases. Integrity in Public Office Commission officials stated the challenges to the implementation of integrity legislation included the need for increased resources, inadequate prosecution of cases, failure of authorities to present the commission’s annual report to parliament, lack of regulations concerning the procedures to deal with bribery and corruption, and lack of public support.

In 2012 the integrity commission rejected two parts of a three-part public complaint brought against the prime minister for abusing his office. The commission began an inquiry into the third charge--that the prime minister used his influence to secure concessions for a business concern in which he allegedly had an interest. In 2012, however, the prime minister’s personal attorney accused the commission of failing to act fairly, and he called on the government to amend the law to change the composition of the committee. In 2014 the prime minister’s personal attorney applied to the High Court for an injunction to prevent the commission from continuing its inquiry. The court granted the injunction pending the High Court’s review of the matter, and a hearing in the case was set for November 2015; however, at the end of September 2016, the High Court had not heard the case.

The Integrity in Public Office Act requires government officials to account annually for their income, assets, and gifts. All offenses under the act, including the late filing of declarations, are criminalized. The integrity commission generally reported on late submissions and inappropriately completed forms but did not share financial disclosures of officials with the DPP.

Dominica is an offshore center with a considerable International Business Company [IBC] presence and internet gaming. Money laundering cases involve external proceeds from fraudulent investment schemes, advance fee fraud schemes, and the placement of euros related to questionable activities conducted in other surrounding jurisdictions. Domestic money laundering is chiefly linked to narcotics activities.

Dominica is uniquely located between the French territories of Guadeloupe and Martinique and, due to its geographical location, the country is used as a transshipment point for narcotics and other criminal activities. For the past few years, money laundering cases involved fraudulent investment schemes, advance fee fraud schemes, credit card fraud schemes and the placement of euros from criminal activities into the financial system from the neighboring French territories of Marie Galante, Les Saintes, Guadeloupe, and Martinique.

Dominica hosts one internet gaming company, twelve offshore banks, and close to 19,000 IBCs. Bearer shares are permitted, but beneficiaries of the bearer shares must be disclosed to financial institutions as part of their KYC programs. The Eastern Caribbean Central Bank licenses and supervises domestic commercial banks. The Financial Services Unit (FSU) within Dominica’s Ministry of Finance supervises and licenses offshore banks, credit unions, insurance companies, internet gaming companies, and the country’s economic citizenship program.

Under Dominica’s citizenship by investment program (CIP), individuals can obtain citizenship for approximately $100,000 for an individual and $200,000 for a family of up to four persons, or through an investment in real estate valued at a minimum of $200,000. There is no residency requirement and passport holders may travel to most Commonwealth and EU countries without a visa. An application for economic citizenship must be made through a government-approved local agent and requires a fee for due diligence or background check purposes. There is no mandatory interview process; however, the government may require interviews in particular cases. Dominica’s CIP has vulnerabilities that present AML and regional security risks and that may make it susceptible to abuse by criminal actors.

Furthermore, the porous borders pose a great challenge to law enforcement officials in effectively policing the various coastlines for drugs and smuggling of goods such as firearms and cash. The government estimates that around 10 percent of cocaine and 25 percent of marijuana moving through Dominican territory is consumed domestically. Law enforcement officials continue to harness all available resources to curtail this illegal trade.

The Organisation of American States noted that the number of convictions for drug trafficking charges rose substantially from 2006-2009, from 47 to 225, while firearms seizures linked to drug trafficking cases rose more than five-fold in the same period, from four to 25. This may indicate an increase in trafficking or potentially be a result of improved interdiction measures.

The government enacted legislation to combat money laundering. The Proceeds of Crime Act of 2014, which is cited as the Anti-Money Laundering and the Suppression of Terrorist Financing Code of Practice, highlights duties of the FIU and the FSU in ensuring that financial institutions and persons carrying on a relevant business put appropriate AML systems and controls in place. The legislation clearly sets out provisions with which relevant entities are bound to comply. There are offenses and penalties created for non-compliance.

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