Spanish
Preventing the country from entering the grey list of the Financial Action Task Force (FATF) is not just a technical matter, but a strategic decision to protect the country's reputation, the stability of the financial system, and the confidence of investors, warned the Association of Multiple Banks of the Dominican Republic (ABA), when analyzing the effects of being on that list for economies.
The ABA explained that the FATF evaluates compliance with the 40 Recommendations that serve as a global standard to prevent money laundering and terrorist financing. It indicated that, if a country shows significant deficiencies, even if there is a willingness to improve, it may be included in the so-called gray list, which generates an alert signal for international markets and correspondent banks.
In an analysis published in the recent edition of its institutional magazine ABANCE, under the signature of Lidia Ureña, Regulatory Manager of the ABA, it was stated that, according to studies by the International Monetary Fund, inclusion in the grey list can reduce capital inflows by 7.6 percentage points of GDP and foreign direct investment by three percentage points of GDP, due to the loss of investor confidence. The World Bank also warns that this condition causes greater friction in international payments, making operations more expensive and limiting access to financing, she explained.
He pointed out that, in practice, this translates into higher costs for local companies, more requirements in international transactions, and a lower willingness of foreign banks to maintain correspondent relationships. Consequently, the productive sectors that depend on foreign trade and foreign investment are usually the most affected, he added.
Dominican Republic has made progress since its last evaluation
In her analysis, Lidia Ureña highlighted that the Dominican Republic has made significant progress since its last mutual evaluation in 2018, strengthening its legal framework, institutional coordination, and supervisory mechanisms. Among these, she cited that the country completed the update of the National Risk Assessment (NRA), led by the Financial Analysis Unit (UAF) and the National Committee Against Money Laundering and Terrorism Financing (CONCLAFIT), and is executing the action plans derived from this process.
These efforts, the article highlighted, are clear signals of the national commitment to maintain the trust of international organizations, investors, and global financial institutions.
The ABA executive stressed that staying off the grey list means preserving the country's reputation, avoiding higher financial costs, and keeping the doors open for investment and banking correspondence. In that order, she suggested that, in view of the fifth round of evaluations, the line to follow is to encourage support for the most vulnerable sectors, keep diagnoses up to date, strengthen institutions, and maintain public-private coordination with goals, deadlines, and evidence.
Complying with FATF standards is not only a regulatory obligation, but "it's about a robust system that generates trust, attracts investment and improves the business climate," he pointed out.
Through the publication, the banking guild reiterated its commitment to the prevention of financial crimes and the promotion of a culture of compliance that allows the Dominican Republic to stay off the grey list, consolidating its position as a reliable, stable and attractive country for investment.
