Financial Crime World

Samoan Authorities Face Challenges in Combatting Money Laundering and Terror Financing

Overview

A recent National Risk Assessment (NRA) report has highlighted several areas of concern in Samoa’s efforts to combat money laundering (ML) and terror financing (TF). The report emphasizes the need for improvement in the country’s anti-money laundering and counter-terrorist financing measures.

Offshore Sector Concerns

The offshore sector, including international business companies (IBCs) and money transfer operators (MTOs), was identified as a high-risk area. Additionally, the domestic banking sector was found to be a material area due to its importance in the country’s economy.

Technical Compliance Issues

While Samoa has made significant progress in improving its technical compliance with international standards, there are still several deficiencies in place. These include:

  • Weaknesses in criminalizing and preventing ML, TF, and proliferation financing
  • Issues with preventative measures, regulation, and supervision of financial institutions and designated non-financial businesses and professions (DNFBPs)
  • Deficiencies in risk assessment, coordination, and policy setting

Need for Improvement

The report highlights the need for improvement in several areas:

  • Conducting a comprehensive assessment of TF risks and those associated with the recently established casino sector
  • Enhancing ongoing due diligence by trust and corporate service providers (TCSPs) on IBCs
  • Improving financial intelligence, ML investigations, and confiscation processes

Challenges Identified

The report also identifies several challenges that need to be addressed:

  • Low level of effectiveness in using financial intelligence and conducting ML investigations
  • Lack of ongoing due diligence by TCSPs on IBCs
  • Inadequate regulation and supervision of financial institutions and DNFBPs

Recommendations

To address these concerns, the NRA recommends that Samoa:

  • Improve its AML/CFT systems, particularly in areas such as risk assessment, coordination, and policy setting
  • Address the risks posed by its offshore sector, including IBCs and MTOs
  • Ensure that financial institutions and DNFBPs are adequately regulated and supervised

Sources

  • National Risk Assessment (NRA) report
  • FATF (Financial Action Task Force) mutual evaluation report