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Solomon Islands Fails to Meet Anti-Money Laundering Regulations, FATF Report Reveals

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The Financial Action Task Force (FATF) has released a report revealing that the Solomon Islands has failed to meet international standards for anti-money laundering regulations. The report highlights several areas where the country falls short of meeting these standards.

Assessing Risk and Applying a Risk-Based Approach

  • The Solomon Islands has not fully implemented a risk-based approach to assessing money laundering risks, making it difficult to identify and mitigate potential threats.
  • This lack of transparency hinders efforts to combat money laundering and terrorist financing.

National Cooperation and Coordination

  • The country’s national cooperation and coordination mechanisms for combating money laundering are lacking, making it difficult to ensure effective communication and cooperation among different agencies and entities.
  • A more robust framework is needed to address this issue.

Money Laundering Offence

  • The Solomon Islands has not fully criminalized money laundering, failing to establish a specific offence under its laws.
  • This omission weakens the country’s ability to effectively prosecute and punish those involved in money laundering activities.

Confiscation and Provisional Measures

  • The report highlights that the Solomon Islands’ confiscation regime is incomplete, with no provision for freezing or seizing assets suspected of being linked to money laundering or terrorist financing.
  • This omission hinders efforts to combat money laundering and terrorist financing.

Terrorist Financing Offence

  • The country has not criminalized terrorist financing, failing to establish a specific offence under its laws.
  • This omission undermines efforts to combat terrorism and terrorist financing.

Targeted Financial Sanctions

  • The Solomon Islands’ targeted financial sanctions regime is incomplete, with no provision for imposing sanctions on individuals or entities suspected of being involved in terrorist financing or proliferation activities.
  • This omission hinders efforts to combat terrorism and terrorist financing.

Non-Profit Organisations

  • The country’s supervisory authorities have not fully implemented measures to ensure that non-profit organisations are subject to adequate supervision and monitoring.
  • This omission creates a risk for money laundering and terrorist financing.

Financial Institution Secrecy Laws

  • The Solomon Islands’ financial institution secrecy laws remain overly broad, allowing for excessive confidentiality and hindering efforts to combat money laundering and terrorist financing.
  • This omission creates a risk for money laundering and terrorist financing.

Customer Due Diligence

  • The report reveals that the country’s customer due diligence measures are inadequate, failing to ensure that financial institutions verify the identity of their customers and conduct regular reviews of customer relationships.
  • This omission creates a risk for money laundering and terrorist financing.

Record Keeping

  • The Solomon Islands’ record-keeping requirements for financial institutions are incomplete, with no provision for maintaining records on a continuous basis or providing access to such records.
  • This omission hinders efforts to combat money laundering and terrorist financing.

Politically Exposed Persons

  • The country’s regulations regarding politically exposed persons (PEPs) are inadequate, failing to ensure that financial institutions conduct enhanced due diligence on PEPs and their family members.
  • This omission creates a risk for money laundering and terrorist financing.

Correspondent Banking

  • The Solomon Islands has not fully implemented measures to regulate correspondent banking relationships, leaving the door open for potential money laundering and terrorist financing activities.
  • This omission creates a risk for money laundering and terrorist financing.

Money or Value Transfer Services

  • The country’s regulations regarding money or value transfer services are incomplete, failing to establish specific requirements for these types of services.
  • This omission creates a risk for money laundering and terrorist financing.

New Technologies

  • The Solomon Islands’ regulations regarding new technologies, such as digital currencies, are inadequate, failing to ensure that financial institutions have adequate procedures in place to detect and prevent money laundering and terrorist financing.
  • This omission creates a risk for money laundering and terrorist financing.

Financial Intelligence Units

  • The country’s financial intelligence units (FIUs) are inadequate, failing to ensure that FIUs have adequate resources and authority to effectively collect, analyze, and disseminate financial intelligence.
  • This omission hinders efforts to combat money laundering and terrorist financing.

Responsibilities of Law Enforcement and Investigative Authorities

  • The report reveals that the Solomon Islands’ law enforcement and investigative authorities have inadequate responsibilities regarding anti-money laundering and combating the financing of terrorism (AML/CFT) activities.
  • This omission creates a risk for money laundering and terrorist financing.

The FATF report highlights the need for the Solomon Islands to strengthen its anti-money laundering regulations and implementing effective measures to prevent and detect money laundering and terrorist financing.