Law 72-02 On Asset Laundering In The Dominican Republic

Author:Pellerano & Herrera
Profession:Pellerano & Herrera
 
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  1. BACKGROUND

    On June 10, 2002 the Dominican Republic passed Law 72-02 on Laundering of Assets Obtained from the Illegal Traffic of Drugs and Controlled Substances, in order to satisfy the need of a legal framework adapted to international standards in the fight against money laundering. Previously, this matter was under the scope of Law 55-02, but this statute had certain gaps, mainly concerning the distribution of goods, products or securities obtained from illegal activities.

    The country ratified international commitments that required the adoption of a statute that could serve to effectively control the transnational phenomena of drug-trafficking, such as the International Convention against Corruption held in Caracas in 1996, the United Nations Convention against Organized Crime held in Palermo, Italy, in 2002, and others.

  2. PURPOSE OF THE LAW

    The provisions of this Law, together with the regulation for their application contained in Decree 20-03 of 14 January 2003, have been established for the purposes of (a) defining the activities that may be considered as laundering of assets deriving from criminal activities; (b) establishing the mechanisms and instruments necessary for the prevention and detection of asset laundering; (c) creating an entity that would coordinate the public sector's efforts towards avoiding the use of our economy for asset laundering; and (d) providing the legal framework through which local authorities shall provide international judicial assistance as agreed in the various international agreements mentioned above.

  3. DEFINITIONS

    Assets are monies, securities, titles, notes or goods obtained through the commission of a serious offense. Goods are understood to include all types of goods, tangible or intangible, movable or real estate properties, and the documents which contain ownership rights over them. Products are all goods obtained or deriving directly or indirectly from the commission of a serious infraction.

    Competent Authorities: Competent judicial authority shall be deemed to include the courts and the public general attorney's office. Competent authority shall include the entity in charge of supervising the compliance of the law by the persons subject to its provisions; the Banking Superintendence, the Internal Revenue Department and the Drug Control Office.

    Confiscation: To deprive a person of property, on a definite basis, by virtue of a decision issued by a competent court.

    Seizure or Freezing of Funds: The temporary prohibition to transfer, exchange, sale or move property, or the custody or temporary control of property by virtue of an order issued by a competent court or authority.

    Serious Offense: includes illegal drug trafficking, illegal arms trafficking, any crime related to terrorism, illegal traffic of humans or their organs, kidnapping, extortions related to video and audio recordings, vehicle theft when it involves transporting the vehicle to another country for the purpose of selling it, sexual trafficking, currency forgery, fraud, and any other infraction sanctioned with at least three (3) years of prison under Dominican law.

    Person or Entity Subject to Law 72-02: any person or entity that, by virtue of Law 72-02 or its regulations, is obligated to comply with the obligations destined to prevent, impede or detect asset laundering. These are specifically:

    Regulated financial institutions; Persons or entities dedicated to brokerage activities of securities, investments or futures; Persons or entities working with currency exchange; The Central Bank of the Dominican Republic; and, Any other person or entity involved in activities that are susceptible to be used in asset laundering such as casinos, real estate brokerage, car dealers, insurance companies and brokers, weapons dealers, professional services, etc. Simulation: the use of a false identity or a third party's identity with their knowledge, with the intent to obtain goods, funds or instruments from any financial institution, without regard to whether these goods were obtained through the commission of a serious offense or not. Also, any action of using public or private documents, electronic means or similar instruments to transfer assets in their favor for profit causing harm to others who had not consented to such transfer.

    Minimum Wage: the average national minimum wage established by the competent authority in labor matters, on the day the infraction is committed.

  4. PUBLIC ENTITIES CREATED BY THE LAW

    NATIONAL COMMISSION AGAINST ASSET LAUNDERING

    The National Commission against Asset Laundering is created by Law 72-02 to promote, coordinate, detect, prevent and sanction asset laundering in the Dominican Republic. It is presided by the President of the National Drug Council and composed by the General Attorney, the State Secretary of Finance, the Bank Superintendent and the President of the National Committee for Drug Control.

    The Commission...

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