Financial Crime World

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Organized Crime Groups Find Samoa an Attractive Hub for Illegal Activities

A recent report has highlighted concerns that international organized crime groups (IOCGs) are drawn to Samoa’s geographic location, stable economy, and advanced banking system, making it an attractive hub for illegal activities.

Why is Samoa an attractive destination?

According to the report, IOCGs need a country with a financial system that allows them to move goods and money without detection. Samoa’s reputation as a secrecy haven, combined with its low capacity law enforcement, makes it an appealing destination for these groups.

Combating the issue

To combat this issue, Samoan authorities have identified several steps they will take to reduce the attractiveness of Samoa to IOCGs. These include:

  • Engaging with international partners to gather intelligence on the activities of these groups
  • Formulating strategies to make Samoa a less appealing location for them

Assessing Risks and Applying a Risk-Based Approach

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The report also highlights several areas where Samoa’s anti-money laundering and counter-terrorist financing (AML/CTF) system falls short. For instance:

  • The country has not implemented a comprehensive risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing.
  • There are no explicit requirements for financial institutions and designated non-financial businesses and professions to assess risks and implement measures for risk mitigation.

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The report also identifies areas where Samoa’s legislation can be strengthened to improve its AML/CTF system. In particular:

  • Samoa lacks the legislation to support targeted financial sanctions relating to terrorism and weapons proliferation financing.
  • Several acts, including the International Companies Act 1988, Trusts Act 2014, Companies Act 2001, MLP Act 2007, and MLP Regulations 2009, require technical amendments to address deficiencies.

Action Items

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In response to the report’s findings, Samoan authorities have committed to taking several steps:

  • Conducting a comprehensive review of its AML/CTF system and implementing recommendations
  • Strengthening its legal framework to improve its AML/CTF system
  • Engaging with international partners to gather intelligence on IOCGs
  • Formulating strategies to reduce the attractiveness of Samoa to IOCGs

By taking these steps, Samoan authorities aim to make it more difficult for IOCGs to operate in the country and reduce the risks associated with money laundering and terrorist financing.