Financial Crime World

Samoan Financial Sector Needs Harmonized Supervision

A recent report highlights the need for Samoa’s supervisory authorities to apply the same standards to both domestic and offshore banks, as part of a broader review of the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) framework.

Key Findings and Recommendations

The report, conducted by an international team, identified key areas for improvement in Samoa’s financial sector:

  • Bank Supervision: Domestic banks should develop more specific policies on connected lending, fitness and propriety tests, and risk management systems. The supervisor’s powers should be strengthened to ensure that all relevant matters are considered in license applications and changes in control are vetted.
  • AML/CFT Measures:
    • Broaden the definition of financial institution to include all offshore entities, including trustee companies.
    • Expand the scope of the Anti-Money Laundering Act to include comprehensive requirements on customer identification and verification, record keeping and retention, and suspicious transaction reporting.
    • Introduce improved forfeiture and confiscation provisions, as well as powers to make penalty orders where forfeiture is not possible.
  • Company Service Providers: Enhance due diligence by trustee companies, particularly with regard to new business transferring to the jurisdiction under redomiciliation. Regular on-site visits and consideration of specific exchange of information agreements with host country supervisors are also recommended.

Insurance Legislation and Securities Regulation

The report also highlighted the need for:

  • Modernized insurance legislation
  • Introduction of basic investment business and securities legislation to regulate fraudulent provision of financial advice and product sales

Government Response

The Samoan government has welcomed the recommendations and is committed to implementing them in order to strengthen its financial sector and reduce the risks associated with money laundering and terrorist financing.