Financial Crime World

Samoa’s Financial Institutions Must Implement Effective Anti-Money Laundering and Combating the Financing of Terrorism Controls

Auckland - Samoa’s financial institutions must implement robust anti-money laundering (AML) and combating the financing of terrorism (CFT) controls to prevent their services from being used by criminals to launder money or finance terrorist activities.

Establishment of Effective AML/CFT Programs

According to a statement released by the Samoa Financial Institutions Authority, all financial institutions operating in Samoa must:

  • Establish and maintain effective AML/CFT programs that address vulnerabilities
  • Assess risks and implement risk-based customer due diligence procedures
  • Include measures to prevent tipping-off, ensure continuity, and provide for adequate supervision and support

Importance of AML/CFT Controls

The statement emphasized that AML/CFT controls are essential to protect the financial system from abuse by money launderers and terrorist financiers. Financial institutions must be vigilant in identifying and reporting suspicious transactions and activities to prevent their services from being used to facilitate criminal activity.

Consequences of Non-Compliance

Under Samoa’s Money Laundering Prevention Act 2007 and Prevention and Suppression of Terrorism Act 2002, financial institutions and their employees face severe penalties if they fail to comply with AML/CFT requirements. Breaches of the legislation can result in fines and imprisonment or both.

Effective Risk Assessment and Management

The statement highlighted the importance of effective risk assessment and management processes, which must take into account:

  • The environment within which the financial institution operates
  • The activity in the business environment
  • Adequate controls for higher-risk clients and services
  • Designation of an individual or individuals at an appropriate level who is/are responsible for managing compliance with AML/CFT requirements

Know-Your-Customer (KYC) Policies and Procedures

Financial institutions operating in a cross-border context are expected to apply accepted minimum standards of know-your-customer (KYC) policies and procedures to both their local and overseas operations. This includes:

  • Communicating policies and procedures to their overseas branches and subsidiaries
  • Having a routine for testing compliance against both home and host country KYC standards

Conclusion

The statement emphasized that AML/CFT controls are not only essential for preventing financial crimes but also crucial for maintaining the integrity of the financial system and protecting the reputation of Samoa’s financial institutions.