Samoa’s Efforts to Combat Money Laundering and Terrorist Financing Under Scrutiny

A recent evaluation has highlighted several areas where Samoa needs to improve its efforts to combat money laundering (ML) and terrorist financing (TF). While the country has made progress in some areas, it is still facing significant challenges in identifying and mitigating ML/TF risks.

Trust and Company Service Providers’ Role

Trust and company service providers (TCSPs) play a crucial role in combating ML/TF, but they are often ineffective in implementing their ongoing customer due diligence (CDD) and suspicious transaction reporting (STR) obligations. This is despite strengthened provisions set to take effect later this year.

Supervisory Gaps

Samoa’s supervision of financial institutions and designated non-financial businesses and professions (DNFBPs) is inadequate, with a lack of resources being a significant factor. The frequency and intensity of compliance inspections are not sufficient, and the country has not introduced a comprehensive, risk-based approach to supervision.

Beneficial Ownership Information

While TCSPs are effective in obtaining beneficial ownership information on creating international business companies (IBCs), this information is only updated annually. Competent authorities can generally obtain beneficial ownership information from Samoan TCSPs in a timely manner, but there is still room for improvement.

International Cooperation

Samoa has demonstrated a strong willingness to provide international assistance and has made significant commitments as a party to various international agreements relating to mutual assistance. The country treats all international requests as high priority and deals with them accordingly, despite being a small and under-resourced jurisdiction.

Risks and General Situation

The 2012 National Risk Assessment (NRA) identified the international sector, particularly IBCs, money transfer operators, and cross-border cash movement as areas of higher risk. While the level of domestic proceeds-generating crimes seems to be low, there have been a small number of foreign requests for information relating to Samoan IBCs.

Assessment of Risk, Coordination, and Policy Setting

Samoa has improved its understanding of ML/TF risks in recent years, but there is still room for improvement. The country is encouraged to conduct a more comprehensive assessment of its TF risks and of risks associated with the recently established casino sector. There is also a need for better coordination between government agencies and the private sector.

Financial Intelligence, Money Laundering, and Confiscation

Samoa’s level of technical compliance has generally improved significantly since 2006, but there are still significant challenges in relation to the use of financial intelligence and ML investigations. The country needs to improve its effectiveness in these areas to combat ML/TF effectively.

Conclusion

Overall, while Samoa has made progress in combating ML/TF, it is still facing significant challenges that need to be addressed. The country’s authorities must work together to improve their understanding of ML/TF risks, enhance their supervision and regulation of financial institutions and DNFBPs, and strengthen their international cooperation efforts.