Solomon Islands Lacks Anti-Money Laundering and Counter-Terrorist Financing Framework

Honiara, Solomon Islands -

The Solomon Islands has been found to be lacking in its anti-money laundering (AML) and counter-terrorist financing (CFT) framework, according to a recent report by the Asia-Pacific Group on Money Laundering (APG).

Shortcomings in AML/CFT Regime

• There is no legal framework governing the implementation of the Financial Action Task Force (FATF) Recommendations.
• Financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) do not have a thorough understanding of AML/CFT risks and obligations.

High-Risk Areas

• The Non-Profit Organization (NPO) sector is identified as a high-risk area for money laundering and terrorist financing.
• There are no regulations in place to deal with Politically Exposed Persons (PEPs) and Special Interest Individuals and Entities (SIFIs).

Customer Due Diligence

• Many FIs and DNFBPs do not conduct thorough checks on their customers, including verifying identity and beneficial ownership.

Supervision and Regulation

• There are no risk-based measures in place to supervise financial institutions and DNFBPs.
• The lack of supervision increases the risk of money laundering and terrorist financing.

Recommendations

The APG report recommends that the Solomon Islands government take immediate action to address these shortcomings and implement a robust AML/CFT regime that complies with international standards. The government must also ensure that FIs and DNFBPs are adequately supervised and regulated to prevent money laundering and terrorist financing.

Conclusion

The Solomon Islands’ lack of AML/CFT framework and supervision poses significant risks to its financial system and economy. It is essential that the government takes immediate action to address these shortcomings and implement a robust AML/CFT regime to protect the country’s financial integrity.