Solomon Islands Face High Risk of Money Laundering and Terrorist Financing

A recent comprehensive report has highlighted the significant risks posed by money laundering and terrorist financing in the Solomon Islands. The report identifies numerous vulnerabilities across various sectors, including banks, finance companies, money transfer services, and precious metal and stone dealers.

Threats and Vulnerabilities

According to the report, all of these threats linked with sectoral vulnerabilities will result in a very high or high level of risk. This is a major concern for authorities, as attention is needed in all areas. With so many potential risks, it will not be possible to immediately implement all essential mitigating strategies to minimize the risks.

Lack of adequate resourcing of supervisory and law enforcement agencies
Inadequate recording and maintaining statistics relevant to threats and vulnerabilities
Limited effective supervision of financial institutions

Terrorism Financing Concerns

The report highlights the potential threat of terrorism financing in the Solomon Islands. Although there have been no identified cases of terrorism financing, the possibility of terrorist-related activities cannot be ruled out.

The growth of social media and youth unemployment may contribute to an increase in terrorism financing
The Counter Terrorism Act 2009 creates the offence of terrorist act and terrorist financing
However, there is limited information or statistical data relating to terrorism, terrorist-related activities, or the financing of terrorism in SI

Capacity and Expertise Gaps

Capacity and expertise gaps continue to raise concerns for the Solomon Islands government’s ability to interdict possible terrorists. Resource constraints, corruption, lack of training for law enforcement and border security officials, and general capacity issues hinder efforts to combat money laundering and terrorist financing.

Recommendations

To address these risks, the report recommends:

Increasing resource allocation to supervisory and law enforcement agencies
Improving recording and maintaining statistics relevant to threats and vulnerabilities
Expanding discussions between Customs and Ministry of Tourism to include shipping agencies and cruise shipping companies on border control regulations
Pursuing counter-terrorism and financing of terrorism programs
Enhancing interagency cooperation and information sharing capabilities among law enforcement bodies
Seeking bilateral and multilateral assistance programs to increase law enforcement capacity
Providing additional training for judges before hearing cases involving terrorism and terrorist financing

Conclusion

The report concludes that the Solomon Islands government must prioritize addressing these vulnerabilities and implementing effective measures to combat money laundering and terrorist financing.