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. The country's ranking on the Transparency International Corruption Perception Index improved significantly from 123 in 2022 to 108 in 2023, reflecting these efforts. However, U.S. companies still view corruption as a barrier to foreign direct investment, citing issues with government competency and favoritism in public tenders, while civil society organizations play a vital role in advocating for transparency.

The Dominican Republic's economy is significantly bolstered by foreign direct investment (FDI), with the country being one of the top recipients in the Caribbean, particularly in sectors like tourism, real estate, and telecommunications. Despite facing challenges such as corruption and bureaucratic inefficiencies, the government actively promotes FDI through tax incentives and its membership in the Central America Free Trade Agreement (CAFTA-DR), which enhances investor protections. The economy has shown resilience, with projections for GDP growth in 2024 around 5%, supported by government subsidies aimed at mitigating 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 has made efforts to improve transparency and address corruption, which may enhance the overall investment environment in the future.