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Protecting Samoa from Money Laundering

Money laundering, a criminal activity that attempts to conceal the true origin and ownership of illicit funds, poses significant risks to Samoa’s economic and social stability. In an effort to combat this menace, the Central Bank of Samoa has established a robust framework to prevent money laundering in the country.

What is Money Laundering?

Money laundering is the process by which criminals attempt to disguise the source of their illegal proceeds as legitimate income. This involves three stages:

  • Placement: Injecting criminal funds into the financial system
  • Layering: Using multiple transactions to conceal the true origin of the funds
  • Integration: Mixing the laundered money with legitimate assets

Why Stop Money Laundering?

Money laundering poses risks to Samoa’s reputation, economic stability, and financial institutions. It can also undermine international efforts to combat large-scale corruption and terrorism. Moreover, it threatens to destabilize the country’s financial sector and erode public trust in its institutions.

Legislative and Regulatory Framework

Samoa has enacted several laws and regulations to prevent money laundering, including:

  • The Money Laundering Prevention Act 2007
  • The Prevention and Suppression of Terrorism Act 2002
  • The Proceeds of Crime Act 2007

These laws provide a framework for reporting suspicious transactions, identifying customers, and enforcing strict compliance measures.

The Money Laundering Prevention Authority

The Central Bank of Samoa Governor serves as the Money Laundering Prevention Authority, responsible for implementing and regulating money laundering prevention measures in Samoa. The authority is supported by the Financial Intelligence Unit (FIU), which provides critical analytical capabilities to detect and prevent money laundering activities.

Financial Intelligence Unit (FIU)

The FIU is a key component of the Central Bank’s anti-money laundering efforts. It:

  • Analyzes suspicious transactions
  • Identifies patterns
  • Disseminates information to law enforcement agencies and financial institutions to facilitate effective investigations and prosecutions

Money Laundering Prevention Task Force

The Money Laundering Prevention Task Force is an advisory body that provides strategic guidance to the Authority on matters related to money laundering and terrorist financing. The task force comprises representatives from various government agencies, including:

  • Attorney-General’s Office
  • Police Department
  • Immigration Department
  • Customs Department
  • Transnational Crime Unit

Border Currency Report (BCR)

The BCR is a mandatory reporting requirement for individuals carrying cash or negotiable bearer instruments exceeding SAT 20,000 or its equivalent in foreign currency when entering or leaving Samoa. Failure to comply with this requirement can result in fines up to SAT10,000 and/or imprisonment for up to five years.

Obligations of Financial Institutions

Financial institutions in Samoa are required to:

  • Maintain accurate records
  • Develop clear customer acceptance policies
  • Conduct proper customer identification (known as “know your customer” or “KYC”) to prevent money laundering

These obligations are stipulated under Part III of the MLPA 2007.

By understanding the risks and consequences of money laundering, Samoa can better protect its financial system and maintain a stable economy for the benefit of all citizens.