Financial Crime World

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Financial Institutions Must Adapt to Different Markets with Unique Risks

In an effort to combat money laundering and terrorist financing, financial institutions in Samoa must adapt their anti-money laundering (AML) and counter-terrorist financing (CFT) policies and procedures to different markets with unique risks.

Compliance Requirements

According to the Money Laundering Prevention Act 2007 and the Prevention and Suppression of Terrorism Act 2002, financial institutions are required to have internal controls that address specific areas, regardless of their size or nature of activities. These include:

  • Vulnerability assessments
  • Risk-based customer due diligence
  • Higher-risk client management
  • Designated responsible persons
  • AML/CFT compliance functions
  • Common control frameworks for group firms
  • Feedback mechanisms
  • Continuity plans
  • Timely updates
  • Staff supervision
  • Training

Severe Penalties for Breaches

Financial institutions and their employees who breach Samoa’s anti-money laundering and counter-terrorist financing legislation face severe penalties. Conviction can result in:

  • Fines not exceeding 10,000 penalty units (approximately USD $4,500)
  • Imprisonment for up to seven years

Assisting Persons Commit Offences

The combined effect of the Money Laundering Prevention Act 2007 and the Prevention and Suppression of Terrorism Act 2002 makes it an offence for any person to provide assistance to a criminal to obtain, conceal, retain, or invest funds if they know or suspect that those funds are proceeds of crime. Such assistance can result in:

  • Fines not exceeding 10,000 penalty units (approximately USD $4,500)
  • Imprisonment for up to seven years

Failure to Report

It is an offence for any person who acquires knowledge or suspicion of money laundering or terrorist financing in the course of their trade, profession, business, or employment not to report such information as soon as reasonably practicable. Failure to report can result in:

  • A maximum fine of 500 penalty units (approximately USD $225)

Tipping-Off

It is an offence for anyone to take any action likely to prejudice an investigation by informing (tipping off) the person who is the subject of a suspicious transaction report or anybody else that a disclosure has been made or that the Police or Customs authorities are carrying out or intending to carry out a money laundering or terrorist financing investigation. Conviction can result in:

  • Imprisonment for up to five years

Implementation of AML/CFT in a Cross-Border Context

The Central Bank of Samoa expects banking and insurance groups to apply an accepted minimum standard of know-your-customer (KYC) policies and procedures to both their local and overseas operations. Parent institutions must:

  • Communicate their policies and procedures to their overseas branches and subsidiaries, including non-banking entities such as trust companies
  • Have a routine for testing compliance against both home and host country KYC standards

General Information

Money laundering is the process by which criminals attempt to conceal the true origin and ownership of money or other assets gained from crime. It is a global problem that affects all countries, with estimates suggesting that between 2-5% of global GDP is generated through criminal activity each year.