Money Laundering Efforts Cost Financial Institutions While Agencies Struggle to Detect and Prevent Offenses

The High Cost of Anti-Money Laundering Measures

A recent report has highlighted the significant financial losses incurred by financial institutions in their efforts to detect and prevent money laundering. Despite these efforts, agencies are still struggling to identify and prosecute these offenses.

• Financial institutions are losing profits due to the resource-intensive nature of anti-money laundering (AML) measures.
• Many institutions have failed to detect or report money laundering, with some even engaging in illegal activity for profit.

The Role of Financial Institutions

The Task Force on Money Laundering Prevention acknowledges that financial institutions play a crucial role in detecting these offenses. However, they cannot solely rely on them to do so. As such, the Task Force will be training its staff to understand AML, counter-terrorism financing (CTF), and proliferation financing (CPF).

Assistance and Data Sharing

The Task Force will provide assistance to regulated entities to help detect ML/TF/PF, while also actively searching their own data holdings for indicators of these offenses. The agencies will periodically collate their collective data to minimize the risk of information silos failing to detect money laundering.

Deterrence, Disruption, and Prevention

The Task Force has emphasized the importance of deterrence in preventing money laundering. This requires a genuine perception of risk among offenders that they will be identified, caught, and punished.

• Deterrence involves actively seeking out and engaging in activities that highlight the robustness of Samoa’s AML/CTF/CPF systems.
• Disruption of these offenses will involve prosecution of offenders, confiscation of illicit assets, and other measures to reduce harm caused by these crimes.
• Prevention involves developing strategies to stop others from following in the footsteps of previous offenders.

Testing, Cooperation, and Focus

The Authority and the Task Force recognize the importance of testing AML/CTF/CPF systems to ensure they are functioning as intended. Regular testing with corrective actions in place will be a feature of Samoa’s system to ensure effectiveness.

• Cooperation between agencies is crucial in the fight against profit-driven crime.
• The Task Force member agencies will share information and personnel freely, while the Financial Intelligence Unit (FIU) will continue to assist all members by sharing information as a source of intelligence whenever required.
• The focus of AML/CTF resources in Samoa will be targeted towards facilitators of money laundering, such as those who assist through company formation, and entities or syndicates that engage in laundering other people’s proceeds.