Money Laundering Schemes Cost Financial Institutions Millions, Says Task Force
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A recent report by the Samoa Money Laundering Prevention Task Force has revealed that financial institutions are losing millions of dollars due to money laundering schemes. The Task Force also found that a significant number of financial institutions have been actively engaging in money laundering and sanctions avoidance for profit.
Financial Institutions’ Struggle with Detection and Reporting
According to the report, financial institutions spend a considerable amount of resources on detecting and reporting money laundering activities, which can be a costly and time-consuming process. Additionally, some financial institutions choose to turn away profitable business deals to prevent laundering, resulting in lost revenue.
Task Force’s Approach to Combating Money Laundering
The Task Force has acknowledged that while financial institutions play a crucial role in detecting money laundering, they cannot be relied upon solely to detect these crimes. As such, the Task Force will train its staff to understand money laundering, terrorist financing, and proliferation financing, and provide assistance to regulated entities to help them detect and prevent these offenses.
Strategies for Combating Money Laundering
The report outlines three key strategies to combat money laundering: deterrence, disruption, and prevention.
Deterrence
- Requires a genuine perception of risk among offenders that they will be caught and punished.
- The Task Force will actively seek out and engage in activities that emphasize the robustness of Samoa’s anti-money laundering systems to enhance this perception.
Disruption
- Involves the intentional disruption of money laundering schemes through prosecution and asset confiscation.
- The Task Force will regularly review intelligence on offending and consider practicable measures to target syndicates and entities involved in money laundering, terrorist financing, and proliferation financing.
Prevention
- Involves developing strategies to stop others from committing similar crimes.
- The Task Force will regularly review intelligence on money laundering, terrorist financing, and proliferation financing and formulate strategies to prevent repetition of these offenses or the commission of similar crimes.
Testing and Correcting Anti-Money Laundering Systems
The report emphasized the importance of testing and correcting anti-money laundering systems to ensure their effectiveness. Just as computer networks are tested to ensure they cannot be hacked, those who implement anti-money laundering systems should also ensure that they are functioning as intended.
Cooperative System
The Task Force has highlighted the need for cooperation among agencies with different powers, information, and skills to effectively combat profit-driven crime. The FIU will continue to assist members of the Task Force by sharing information as a source of intelligence whenever required.
Focus on Facilitators
The report stressed that it is more cost-effective to change the behavior of facilitators of money laundering than it is to change the behavior of every predicate offender or would-be offender. The focus of anti-money laundering law enforcement and regulatory action should be targeted towards facilitators of money laundering, such as those who assist through the formation of companies, and those people, entities, or syndicates that engage in the laundering of other people’s proceeds.
High-Risk Areas
The report acknowledged that some areas are higher-risk than others when it comes to money laundering. Task Force resources will be applied to known money laundering activities before moving on to lower-order risks.
Conclusion
Overall, the report highlights the importance of a multi-faceted approach to combating money laundering and terrorist financing in Samoa, including deterrence, disruption, prevention, testing, cooperation, and targeting facilitators of these crimes.