Samoan Financial System Fails to Meet International Anti-Money Laundering Standards
A recent report has highlighted several shortcomings in Samoa’s anti-money laundering (AML) and combating the financing of terrorism (CFT) framework, posing a significant risk to the country’s financial system.
Shortcomings in AML/CFT Framework
The National Risk Assessment (NRA) 2014 and the Asia-Pacific Group on Money Laundering (APG)/Financial Action Task Force (FATF) Mutual Evaluation have identified several areas of concern, including:
- Lack of Feedback: No feedback is provided to financial institutions and designated non-financial businesses and professions on findings from NRA.
- Inadequate Resources Allocation: Insufficient allocation of resources to prevent or mitigate money laundering/terrorist financing.
- Potential Exemptions: Potential exemption for trustee companies providing offshore financial services without a proven low-risk assessment.
- Insufficient Monitoring: Failure to assess risk and implement measures for mitigation.
Lack of Legislation
The report also notes that Samoa lacks legislation to support targeted financial sanctions (TFS) relating to terrorism and weapons proliferation financing. Additionally, the country’s laws need to be amended to address technical deficiencies in areas such as:
- International Companies: International companies, trusts, companies, and money laundering prevention.
Commitment to Improvement
To address these concerns, the Samoan government has committed to implementing several action items, including:
- Providing Feedback: Providing feedback on findings from NRA to financial institutions and designated non-financial businesses and professions.
- Comprehensive Approach: Implementing a comprehensive, risk-based approach to allocating resources and preventing or mitigating money laundering/terrorist financing.
- Trustee Company Exemptions: Ensuring that trustee companies providing offshore financial services are only exempted from obligations under the Money Laundering Prevention Act 2007 if they have been assessed as low-risk.
Strengthening Legal Framework
The government has also committed to strengthening its legal framework by introducing legislation to support targeted financial sanctions and amending existing laws to address technical deficiencies.
Commitment to Improvement
“The Samoan government is committed to improving our AML/CFT system to ensure that we can effectively prevent money laundering and terrorist financing,” said the Prime Minister. “We will work closely with international partners to achieve this goal.”
By addressing these shortcomings, Samoa aims to strengthen its financial system and meet international anti-money laundering standards.