Samoa’s Banking System Needs Harmonization

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In a move aimed at strengthening the country’s financial sector, authorities have been advised to apply the same supervisory standards to both domestic and offshore banks.

Report Highlights Need for Modernization and Harmonization

A recent report by an international team of experts has identified that Samoa’s banking system needs to be modernized and harmonized to ensure effective regulation and supervision. The report highlights that while the country has made progress in developing its anti-money laundering measures, there is still room for improvement.

Recommendations for Domestic Banks

• Develop more specific policies on connected lending
• Implement fitness and propriety tests
• Establish risk management systems
• Build capacity to undertake on-site examinations and off-site analysis

Recommendations for Offshore Banks

• Require a real physical presence in Samoa with mind and management in place or face removal of banking license
• Eliminate limitations on authorities’ access to customer information
• Apply the same supervisory and regulatory standards to domestic and offshore banks

Additional Recommendations

• Amend definition of financial institution to include all offshore entities
• Broaden scope of Samoa’s anti-money laundering law
• Introduce common provisions in all regulatory laws requiring that shareholders and directors of financial service providers be “fit and proper” persons

Insurance Legislation Reform Needed

The report highlights the need for insurance legislation reform and the introduction of basic investment business and securities legislation to regulate fraudulent provision of financial advice and product sales.

Conclusion

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Overall, the experts’ recommendations aim to strengthen Samoa’s banking system and prevent financial crimes such as money laundering and terrorist financing.