On June 1st 2017, Dominican nationals and residents woke up subject to a new Money Laundering framework. Law No. 155-17 replaced outdated money laundering statute No. 72-02, which had been enacted with a main focus on money laundering derived from illegal drug-related activities.
The executive and legislative branches pushed for the approval of this new statute in record time during the first half of 2017, following guidance from The Financial Action Task Force of Latin America (GAFILAT), a G-7 regional organization. Non-adherence to said general guidelines by Fall 2017 could have caused the country to be blacklisted and seen its access to major international capital markets-which the D.R. has grown very fond of in the past few years-closed.
After all the buzz this topic has received in the general media, we are certain most Casa residents, be it Dominican or foreign, are already wondering if and how this new law will affect them. Their worries are not at all unfounded:
The main impact this new statute will have on everyday life, will be the limits it imposes on cash operations. New strict limits have been set for cash payments in certain operations the law outlines as potential vehicles for money-laundering schemes, such as:
Payments for real estate above RD$1,000,000. Payments for motor vehicles above RD$500,000. Payments for jewellry above RD$450,000. Payments for corporate share transfers above RD$250,000. One major change for the real estate market brought by this new law, is that now, regardless of the amount involved, Registrar of Titles are requiring buyers to also file evidence of payment through a non-cash method in order to process their title conveyances. Not complying with this new requirement, will mean that their conveyance will be rejected and title will remain in their seller's name, with all the risks that entails. So, if for example, purchase price payment for a US$400,000 villa is made through an international wire transfer, the Registrar of Titles will be requiring the buyer to deposit his bank's wire or swift confirmation for this exact amount and the wire's full details. Before this new law, the parties would limit themselves to mentioning the price in the signed deed of sale and that said price had been paid in its entirety without any further details.
Similar procedures have been set up at the Tax Office (DGII) for motor vehicle title transfers and at Chambers...