Financial Crime World

International Organized Crime Groups Find Samoa Attractive Transit Point

Samoa’s strategic location, stable economy, and advanced banking system have made it an attractive transit point for international organized crime groups (IOCGs), according to a recent report.

Why IOCGs are attracted to Samoa

  • Samoa’s reputation as a secrecy haven with low capacity law enforcement makes it an appealing location for illegal activities.
  • The country’s lack of violent and petty crime creates a sense of security, making it easier for IOCGs to operate undetected.

Challenges in addressing IOCG activity

  • IOCGs need to be able to move goods and money in order to conduct their business. Samoa’s financial system must prevent the movement of funds to pay bribes, purchase drugs or other contraband, and repatriate profits.
  • The country lacks intelligence on IOCG activities, which hinders its ability to effectively combat these groups.

Action Items

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1. Engage with international authorities

  • Commence engagement through the Transnational Crime Unit (TCU) and other sources on the nature and extent of IOCGs in operation in Samoa.
  • Formulate steps to reduce the attractiveness of Samoa as a place for IOCGs to do business.

Assessing Risks & Applying a Risk-Based Approach

Challenges in risk assessment

  • Samoa’s National Risk Assessment (NRA) does not consider the types or volume of threats associated with predicate offenses.
  • The NRA lacks a comprehensive risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering/terrorist financing.

Action items

1. Strengthen national risk assessment

  • Undertake a process to ensure that the next NRA considers in-depth the types or volume of threats associated with predicate offenses.
  • Provide feedback on findings from NRAs to financial institutions (FIs) or designated non-financial businesses and professions (DNFBPs).

2. Implement risk-based approach

  • Apply a comprehensive, risk-based approach to allocating resources and implementing measures to prevent or mitigate ML/TF based on assessed risks.

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  • Samoa’s legislation lacks provisions to support targeted financial sanctions relating to terrorism and weapons proliferation financing.
  • The country’s AML/CFT system is in need of improvement to reduce its attractiveness to IOCGs.

Action items

1. Document legislative improvements required

  • Commence a process to document the legislative improvements required and pursue a process of legislative reform.

2. Amend relevant laws

  • Amending relevant laws, including the International Companies Act 1988, Trusts Act 2014, Companies Act 2001, MLP Act 2007, and MLP Regulations 2009 to address technical deficiencies.

In conclusion, Samoa’s authorities must take concrete steps to strengthen the legal framework and implement a comprehensive risk-based approach to prevent or mitigate money laundering/terrorist financing.