Financial Crime World

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Samoa’s Lax Laws Attract International Criminals, Say Experts

Samoa, a Pacific island nation known for its stunning beaches and lush tropical forests, has emerged as a popular transit point for international organized crime groups (IOCGs). The country’s stable economy, low levels of violent crime, and advanced banking system make it an attractive haven for criminals.

A Haven for Criminals

IOCGs, including drug traffickers, money launderers, and terrorist financiers, have been drawn to Samoa’s secrecy havens and lax laws. The country’s lack of robust anti-money laundering (AML) and combating the financing of terrorism (CFT) measures has created a haven for these groups to move goods and money undetected.

Expert Concerns

Experts warn that IOCGs need a financial system that allows them to:

  • Move funds
  • Pay bribes
  • Purchase contraband
  • Repatriate profits

Samoa’s advanced banking system and lack of effective AML/CFT regulations make it an attractive destination for these criminals.

Government Efforts

To combat this issue, Samoan authorities have launched an effort to:

  • Identify sources of intelligence on IOCGs operating in the country
  • Reduce the attractiveness of Samoa as a place for IOCGs to do business

The government has also committed to amending existing laws and implementing a comprehensive risk-based approach to allocating resources and preventing or mitigating money laundering/terrorist financing.

Areas for Improvement

Experts have identified several areas where Samoa’s laws need to be tightened, including:

  • Lack of legislation supporting targeted financial sanctions (TFS) relating to terrorism and weapons proliferation financing
  • Technical deficiencies in existing laws such as the International Companies Act 1988, Trusts Act 2014, Companies Act 2001, MLP Act 2007, and MLP Regulations 2009

Next Steps

To strengthen its AML/CFT system, Samoa needs to:

  • Implement a comprehensive risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering/terrorist financing
  • Ensure that financial institutions and designated non-financial businesses and professions assess risks and implement measures for risk mitigation

The Samoan authorities have committed to taking the following actions:

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

The government has also agreed to address several areas identified by experts, including:

  • Conducting a comprehensive risk assessment of the country’s AML/CFT system
  • Implementing a risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering/terrorist financing
  • Strengthening its legal framework to support targeted financial sanctions (TFS) relating to terrorism and weapons proliferation financing

Conclusion

By taking these steps, Samoa can reduce the attractiveness of its country as a transit point for IOCGs and protect its economy from the risks associated with money laundering and terrorist financing.