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A Kleptocracy is refined as a country where those in power exploit national resources, and steal them, for their own personal gain, thus depriving the people of their own country of their country's assets. While we generally think of jurisdictions like Russia or Panama, when we use that term, the situation in the Commonwealth of Dominica also fits that definition; Dominica has become a den of thieves, and most of the bad actors are members of the current government, or ruling political party.

Since the country's dominant agriculture industry was essentially destroyed, due to a natural disaster, the sole substantial source of cash flow into the local economy has been the Citizenship by Investment, or CBI, program, which results in a major inflow of capital. Unfortunately, greedy and amoral government officials, at the highest level, have diverted much of the income received from the CBI program as follows:

(1) The ruling political party has used some of the CBI proceeds to, frankly, buy elections on voting day, perpetuating its stranglehold on power, for close to two decades.

(2) Senior officials have helped themselves to large portions of CBI receipts, laundering and subsequently investing their ill-gotten gains abroad.

(3) Associates of the ruling party have obtained lucrative positions, as agents, to sell the CBI program, receiving obscenely excessive commissions and fees, most of which should rightly have gone into the national treasury of Dominica.

(4) Construction projects, funded by the CBI program, have been intentionally awarded, in no-bid contracts, to entities friendly to the current government, where pricing of these projects was adjusted upward, and approved, by government. Bribes and kickbacks were subsequently paid to the same Dominican government officials that awarded the contracts, and also to very senior government officers.

(5) In the most egregious offense, prized diplomatic passports were illegally sold to foreign nationals, of ill repute, and all those funds covertly diverted into the pockets of government and party officials. No accounting of these funds has ever been released, and no list of diplomatic passport holders ever made public. It is a national disgrace.

(6) CBI funds have been illegally distributed throughout Dominica, to influence locals, and to convince them to support the existing regime, with the promise of future payoffs, to sustain their loyalty.

Bank compliance officers, think about these details, when you are called upon to open an account for someone who says he is a high net-worth businessman from Dominica. He could be a corrupt Politically Exposed Person (PEP),  a wealthy member of the Dominica Labour Party, or a commission agent of the CBI program, all of whom are unsuitable as bank customers, for any purpose. You do not want the negative publicity that their eventual arrest, on money laundering, or corruption, charges will bring to your bank.  


Chronicles of Monte Friesner - Financial Crime Analyst

Contributed by Kenneth Rijock - Financial Crime Consultant