Preventing Funds Fraud: Banks in Samoa Step Up Efforts
The Central Bank of Samoa has reiterated its commitment to preventing money laundering and terrorist financing in the country’s financial sector. In a bid to curb these illegal activities, banks in Samoa have been urged to implement robust measures to detect and prevent funds fraud.
Understanding Money Laundering
Money laundering is the process by which criminals attempt to conceal the true origin and ownership of proceeds from criminal activities. This practice involves three stages:
- Placement: Criminals place dirty money into the financial system
- Layering: Multiple transactions are used to hide the true origin of the money
- Integration: The money is finally mingled with legitimate funds
Risks Associated with Money Laundering in Samoa
The Central Bank of Samoa has identified several risks associated with money laundering in Samoa, including:
- Economic and social stability
- Reputation of the financial sector
- Stability of financial institutions
- Corruption
- International standards and best practices
To mitigate these risks, the bank has established a Money Laundering Prevention Authority and a Task Force to advise on issues related to money laundering or terrorist financing.
Detection Measures
One measure used by banks in Samoa to detect funds fraud is the Border Currency Report. This report requires individuals leaving or entering the country carrying cash or negotiable bearer instruments worth $20,000 or more to fill out a form. Failure to comply can result in fines of up to $10,000 and five years’ imprisonment.
Obligations under the Money Laundering Prevention Act
Financial institutions are obligated to:
- Keep relevant records for a minimum period of five years
- Develop clear customer acceptance policies and procedures
- Identify customers properly
- Establish systemic procedures for identifying new customers
- Document and enforce policies for identification
- Take extra precautions on transactions with jurisdictions lacking adequate anti-money laundering systems
Collaboration and Best Practices
The bank has also emphasized the importance of financial institutions working closely with government agencies, departments, and the Financial Intelligence Unit to prevent funds fraud. The Task Force, comprising representatives from various government agencies and organizations, makes recommendations to the Authority regarding issues related to money laundering or terrorist financing.
Conclusion
Banks in Samoa are urged to take these obligations seriously and implement robust measures to detect and prevent funds fraud. By doing so, they can help maintain the country’s economic stability, reputation, and international standing.