Financial Crime World

Transit Hub for Organized Crime Groups Attracts Attention

Samoa’s unique combination of geographic location, stable economy, and advanced banking system has made it an attractive destination for international organized crime groups (IOCGs). The country’s reputation as a secrecy haven with low law enforcement capacity has also contributed to its appeal. However, authorities are working to reduce the attractiveness of Samoa to IOCGs by identifying sources of intelligence on their activities and taking steps to prevent them from operating in the country.

Assessing Risks and Applying a Risk-Based Approach

The Monetary Exchange Regulation (MER) notes that Samoa’s National Risk Assessment (NRA) has some limitations. The NRA does not adequately consider the types and volume of threats associated with predicate offenses, nor does it provide feedback on findings to financial institutions and designated non-financial businesses and professions.

To address this, authorities will undertake a process to ensure that the next NRA considers in-depth the types or volume of threats associated with predicate offenses. A comprehensive risk-based approach will also be implemented to allocate resources and implement measures to prevent or mitigate money laundering and terrorist financing.

Key Actions

  • Identify sources of intelligence on IOCG activities
  • Take steps to prevent IOCGs from operating in Samoa
  • Conduct a thorough National Risk Assessment (NRA)
  • Provide feedback on findings to financial institutions and designated non-financial businesses and professions

Samoa’s legislation lacks provisions to support targeted financial sanctions (TFS) relating to terrorism and weapons proliferation financing. The country should amend its laws, including the International Companies Act 1988, Trusts Act 2014, Companies Act 2001, MLP Act 2007, and MLP Regulations 2009, to address technical deficiencies.

The MER notes that the range of sanctions applicable to financial institutions and designated non-financial businesses and professions is not considered proportionate and dissuasive. To address this, authorities will commence a process to document legislative improvements required and pursue a process of legislative reform.

Action Items

  • Engage with the Transnational Crime Unit and other sources to identify the nature and extent of IOCGs in operation in Samoa
  • Reduce the attractiveness of Samoa as a place for IOCGs to do business
  • Consider in-depth threats associated with predicate offenses in the next NRA
  • Provide feedback on findings from the NRA to financial institutions and designated non-financial businesses and professions
  • Implement a comprehensive risk-based approach to prevent or mitigate money laundering and terrorist financing
  • Exempt trustee companies providing offshore financial services in Samoa only if they pose a low risk
  • Allow simplified measures only where lower risks have been identified and in the absence of any suspicion of money laundering or terrorist financing