FATF Status

The Dominican Republic is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest Follow-Up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Dominican Republic was undertaken in 2019. According to that Evaluation, The Dominican Republic was deemed Compliant for 14 and Largely Compliant for 20 of the FATF 40 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 2 of the Effectiveness  & Technical Compliance ratings.

The Dominican Republic has made strides in combating corruption, with improved enforcement of anti-corruption laws under President Abinader's administration, which has focused on transparency and accountability. Notably, the country's rank on the Transparency International Corruption Perception Index improved significantly from 123 in 2022 to 108 in 2023. However, U.S. companies still view corruption as a barrier to foreign direct investment, citing issues such as poorly drafted public tenders and the need for extensive compliance measures.

The Dominican Republic has historically been one of the top recipients of foreign direct investment (FDI) in the Caribbean, with significant contributions from sectors such as tourism, real estate, and telecommunications. Despite facing challenges like corruption and bureaucratic inefficiencies, the government actively promotes FDI through tax exemptions and incentives, while also benefiting from its membership in the Central America Free Trade Agreement-Dominican Republic (CAFTA-DR), which enhances investor protections. The economy has shown resilience, with projected GDP growth of around 5 percent for 2024, driven by government subsidies and efforts to mitigate inflation.

The investment climate in the Dominican Republic is characterized by a strong emphasis on attracting foreign direct investment (FDI), supported by generous tax exemptions and incentives, particularly in sectors like tourism, real estate, and renewable energy. However, foreign investors face challenges such as systemic corruption, unclear regulations, and bureaucratic hurdles, which can complicate the investment process. Despite these issues, the government is making efforts to improve transparency and address corruption, which may enhance the overall investment environment in the future.