Financial Crime World

Strengthening Financial Sanctions Enforcement Agencies in the Solomon Islands

===========================================================

The Solomon Islands Government has taken significant steps to enhance its financial sanctions enforcement agencies, aligning with the recommendations of the Financial Action Task Force (FATF). This effort aims to prevent money laundering and the financing of terrorism.

Establishing SIFIU

The country’s financial intelligence unit, SIFIU, was established to prevent money laundering and the financing of terrorism. As part of this initiative:

  • Banks are now required by law to report suspicious transactions to SIFIU.
  • Since 2006, over [x] Suspicious Transaction Reports have been filed, with assistance from SIFIU training staff to recognize and report suspicious transactions and appointing a Money Laundering Compliance Officer (MLRO).

Setting up the Anti-Money Laundering Committee

The government has established an Anti-Money Launderling Committee, comprising key officials from various agencies, including:

  • Attorney-General
  • Permanent Secretary of Finance
  • Police Commissioner
  • Governor of the Central Bank of Solomon Islands

This committee will work together to:

Technical Working Group

A Technical Working Group has been set up to provide expert advice on financial intelligence and suspicious transactions. This group will assist in:

Risk Assessment Exercise

A risk assessment exercise was conducted to identify the major types of financial crime generating funds to be laundered, map the “money trail” used for laundering, educate banks and other financial service providers about high-risk sources of financial crime, and prioritize further research areas.

The assessment highlighted several key issues affecting the Solomon Islands, including:

Major Issues

  • Corruption: widespread misuse of official funds and office for private gain
    • Auditor-General has reported numerous cases of non-compliance with financial legislation and regulations, officials acting outside their authority, and breakdowns in critical management systems.
  • Fraud, forgery, and revenue evasion: millions of dollars lost through government employee fraud and lack of action to enforce revenue collection or recover overpayments.
  • Environmental crime: illegal logging causing deforestation and generating large sums to be laundered.
  • Sexual exploitation: trafficking of Asian women into Solomon Islands for prostitution
    • Illicit drugs: cannabis production and sale

Improving Financial Sanctions Enforcement Agencies

These findings will inform the government’s efforts to improve financial sanctions enforcement agencies in the Solomon Islands, with a focus on targeting high-risk areas and improving detection and disruption of serious financial crimes.

By strengthening its financial sanctions enforcement agencies, the Solomon Islands Government aims to effectively prevent money laundering and the financing of terrorism, ultimately promoting economic stability and security for its citizens.