Financial Crime World

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Solomon Islands’ Financial Intelligence Unit Urged to Enhance Proactive Working

A recent report has highlighted several deficiencies in Solomon Islands’ financial intelligence regime, emphasizing the need for closer proactive working with the Solomon Islands Financial Intelligence Unit (SIFIU).

Deficiencies and Weaknesses

The report identified several technical deficiencies, including:

  • SIFIU’s operational independence and autonomy remain a key area of improvement.
  • The unit has only achieved one conviction for money laundering (ML) since 2013.
  • There is no policy or strategy to pursue the proceeds of crime and confiscate criminal assets.
  • No legal framework exists for terrorist financing (TF).
  • No supervision of financial institutions and designated non-financial businesses and professions (DNFBPs) implementation of TF requirements.

Weaknesses in AML/CFT Measures

The report also highlighted several weaknesses in Solomon Islands’ anti-money laundering (AML) and counter-terrorist financing (CFT) measures, including:

  • Lack of understanding of ML/TF risks among some financial institutions.
  • Limited application of customer due diligence (CDD) measures.
  • Inadequate reporting of suspicious transactions or activities.

Non-Profit Organizations and DNFBPs

The report noted that there is no legal framework for the regulation of non-profit organizations (NPOs), which are considered high-risk for ML/TF. Additionally, many DNFBPs, including accountants and lawyers, lack a clear understanding of the requirements to identify and verify beneficial ownership information and control customers and transactions for AML/CFT purposes.

Recommendations

To address these deficiencies and weaknesses, it is essential that SIFIU works closely with other stakeholders, including financial institutions, DNFBPs, and law enforcement agencies. This includes:

  • Developing a risk-based approach to supervision.
  • Improving CDD measures.
  • Increasing awareness among financial institutions and DNFBPs of ML/TF risks.

Conclusion

By taking a more proactive approach to AML/CFT compliance and cooperation with SIFIU, Solomon Islands can better protect its financial system from the threats of money laundering and terrorist financing.