Banks in Samoa Take Steps to Prevent Fraud and Money Laundering
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In a bid to prevent the scourge of money laundering and fraud, banks in Samoa are taking proactive measures to ensure that their financial systems are secure and transparent.
Understanding Money Laundering
According to the Central Bank of Samoa, money laundering is the process by which criminals attempt to conceal the true origin and ownership of funds derived from illegal activities. The bank notes that there are three stages of money laundering:
- Placement: The initial stage where illegally obtained funds are introduced into the financial system.
- Layering: The second stage where the funds are transferred through multiple transactions to disguise their source.
- Integration: The final stage where the laundered funds are integrated into the legitimate economy.
Measures Taken by Banks in Samoa
To combat money laundering, the Central Bank has implemented a number of measures, including:
Compliance Obligations
Banks in Samoa are required to comply with certain obligations to help prevent financial crime. These include:
- Keeping relevant records for a minimum period of five years
- Developing clear customer acceptance policies and procedures
- Properly identifying customers through the “know your customer” (KYC) process
Enhanced Due Diligence
Banks are also required to establish a systemic procedure for identifying new customers, document and enforce policies for identification of customers and those acting on their behalf, and enforce extra precautions on transactions received or sent to jurisdictions that do not have adequate anti-money laundering (AML) systems in place.
Border Currency Report
Another measure taken by banks in Samoa is the border currency report. This requires any person who leaves or enters Samoa carrying cash or negotiable bearer instruments worth $20,000 or more to declare it at the border. Failure to comply with this requirement can result in a fine of up to $10,000 and five years in jail.
Importance of Financial Intelligence Unit (FIU)
The Central Bank has also emphasized the importance of the FIU in detecting and preventing money laundering. The FIU is responsible for receiving, analyzing, and disseminating financial intelligence related to suspicious transactions or activities that may be linked to money laundering or terrorism financing.
Conclusion
By taking these measures, banks in Samoa are working to prevent the risks posed by money laundering and fraud, including economic and social instability, damage to the reputation of the financial sector, and corruption.