Financial Crime World

Samoan Paradise for Criminals: IOCGs Flock to Island Nation

Samoa, renowned for its picturesque beaches and tropical climate, has inadvertently become a haven for international organized crime groups (IOCGs). The Pacific island nation’s stable economy, advanced banking system, and reputation as a secrecy haven have attracted criminals seeking to launder money, finance terrorism, and engage in other illicit activities.

Attractive Features

  • Stable economy
  • Advanced banking system
  • Reputation as a secrecy haven
  • Low levels of violent and petty crime
  • Limited law enforcement capabilities

These factors make Samoa an attractive destination for IOCGs, allowing them to operate with relative ease. Authorities have recognized the need to strengthen their anti-money laundering (AML) and counter-terrorism financing (CTF) system to combat this issue.

Strengthening AML/CTF System

To address these concerns, Samoan authorities have committed to implementing several actions:

  • Commencing engagement with IOCGs through the Transnational Crime Unit (TCU) and other sources to identify their activities and reduce the attractiveness of Samoa as a place for them to operate.
  • Formulating steps to reduce the country’s appeal to IOCGs, including improving its AML/CTF system and increasing transparency in financial transactions.

Additionally, authorities plan to strengthen the legal framework by amending several laws:

  • International Companies Act 1988
  • Trusts Act 2014
  • Companies Act 2001
  • MLP Act 2007

This will help improve the robustness of Samoa’s AML/CTF system and enable the country to better combat money laundering, terrorist financing, and other financial crimes.

The Road Ahead

The fight against IOCGs in Samoa is a complex one, requiring cooperation from both domestic and international authorities. By implementing these measures, Samoan authorities can help reduce the country’s appeal as a hub for criminal activity and protect its reputation as a safe and welcoming destination for tourists and legitimate businesses alike.

Note: The Financial Action Task Force (FATF) has identified several areas where Samoa’s AML/CTF system falls short, including:

  • Lack of comprehensive, risk-based approach
  • Inadequate monitoring of compliance with AML/CTF regulations
  • Potential exemption of trustee companies providing offshore financial services from certain obligations under the Money Laundering and Proceeds of Crime Act 2007.