Financial Crime World

Samoa’s Attractiveness to International Organised Crime Groups

Samoa has recently been highlighted as an attractive destination for international organised crime groups (IOCGs) due to its geographic location, stable economy, advanced banking system, and reputation as a secrecy haven. The country’s low levels of violent and petty crime have also contributed to its appeal.

Why IOCGs Find Samoa Attractive

  • Geographic location
  • Stable economy
  • Advanced banking system
  • Reputation as a secrecy haven
  • Low levels of violent and petty crime

However, experts say that an effective anti-money laundering/counter-terrorism financing (AML/CTF) system has the potential to reduce Samoa’s appeal to IOCGs. These groups need to be able to move goods and money in order to conduct business, and a country with a financial system that prevents such movement is unattractive to them.

Assessing Risks and Applying a Risk-Based Approach

A recent Money Laundering and Terrorist Financing (ML/TF) National Risk Assessment (NRA) identified several weaknesses in Samoa’s AML/CTF system, including:

  • Lack of consideration of predicate offences
  • Inadequate feedback to financial institutions (FIs)
  • Failure to implement a comprehensive risk-based approach

Action items have been identified to address these weaknesses, including:

  • Commencing engagement with IOCGs
  • Formulating steps to reduce the country’s attractiveness as a place for IOCGs to do business
  • Implementing a comprehensive risk-based approach to allocating resources and implementing measures to prevent or mitigate ML/TF

The NRA 2014 and APG/FATF Mutual Evaluation have identified areas in Samoa’s legislation that can be tightened to improve the robustness of its AML/CTF system, including:

  • Need for legislation to support targeted financial sanctions (TFS) relating to terrorism
  • Legal framework for TFS relating to weapons proliferation financing

Action items have been identified to address these weaknesses, including:

  • Commencing a process to document legislative improvements required
  • Pursuing a process of legislative reform

Conclusion

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Samoa’s attractiveness to international organised crime groups is a serious concern that requires immediate attention. The country’s authorities must work to identify sources of intelligence, reduce its appeal as a place for IOCGs to do business, and strengthen its legal framework to prevent money laundering and terrorist financing.