What is the Financing of Terrorism and how is it different from Asset Laundering?

The financing of terrorism is any kind of economic action, aid or intermediation providing financial support to the activities of terrorist groups or elements.  The surge in the importance of combatting the financing of terrorism is due to the September 11, 2001 attacks and the recent threat represented by terrorist groups.

In the Dominican Republic, the crime is set forth in Law No. 267-08 on Terrorism, which created the National Anti-Terrorist Committee and the National Anti-Terrorist Agency.

The financing of terrorism is framed by Article 5 of Law No. 155-17, which defines it as any direct or indirect type of action, aid or intermediation which facilitates the financing of operational and logistic costs for terrorist activities, development and maintenance of individuals and/or terrorist organization, even lacking a direct relationship with a terrorist act.

Differences Financing of Terrorism and Asset Laundering

Article 2 of Law 155-17 frames the concept of obligated subject, understood to be the individual or corporate person which, by virtue of this law, is obliged to comply with obligations such as preventing, detecting, evaluating, and mitigating the risk of asset laundering and the financing of terrorism and other prevention measures.Liability of Obligated Subjects in the event of asset laundering and the financing of terrorism

Types of obligated subjects, according to Dominican legal precedent.

The law considers there to be two types of obligated subjects, namely financial obligated subjects categorized as being intermediary financial entities, asset intermediaries, the persons who are intermediaries in the exchange of foreign currency, and others. And non-financial obligated subjects, those exercising other professional, commercial or business activities which, by their nature, are susceptible to activities for asset laundering and the financing of terrorism, are deemed to be non-financial obligated subjects, lawyers, notaries, as well as casinos, factoring companies, real estate agents, and others

Going beyond the need to refrain from asset laundering and the financing of terrorism, individuals and companies which may be characterized as “obligated subjects”, Article 34 of Law 155-17 establishes the obligation of a have a formal compliance program to detect, avoid and remove activities which might be prohibited by the law.

Article 34 of Law 155-17 establishes the obligation for all obligated subject to devise, adopt and implement a compliance program.