Samoa’s Banking System Needs Harmonization

To strengthen its financial sector, Samoa should consider treating both domestic and offshore banks under the same supervisory standards, apart from tax treatment, according to a recent report.

Progress Made, but More Work Needed

The report examined the country’s legal framework for anti-money laundering (AML) and combating the financing of terrorism (CFT). While some progress has been made in developing AML/CFT measures, there is still much work to be done.

Key Recommendations

• Apply the same supervisory and regulatory standards to both domestic and offshore banks
  • Ensure all banks operating in Samoa are subject to similar levels of scrutiny and oversight
• Require offshore banks to establish a real physical presence in Samoa with management and staff in place, or face removal of their banking license
  • Limit authorities’ access to customer information should not be limited

Additional Recommendations

• Broaden the scope of Samoa’s AML/CFT legislation to include comprehensive and substantive requirements for:
  • Customer identification and verification
  • Record-keeping and retention
  • Suspicious transaction reporting
• Introduce a Financial Intelligence Unit (FIU) with governance and oversight structure
  • Enable effective implementation of AML/CFT measures and sharing of information with foreign counterparts
• Enhance due diligence on new business transferring to Samoa under redomiciliation for trustee companies operating in the country
• Conduct regular on-site visits to ensure compliance

Conclusion

The report highlights the importance of strengthening Samoa’s financial sector through the implementation of robust AML/CFT measures and the application of consistent supervisory standards across all banks operating in the country.