Financial Crime World

Samoa’s Financial Institutions Act: New Requirements for Auditors and Lenders

The Government of Samoa has introduced new regulations to strengthen the country’s financial sector. The Financial Institutions Act, effective as of [date], aims to enhance the stability and transparency of Samoa’s financial institutions.

Key Requirements for Licensed Financial Institutions

  • Auditor Reporting: Institutions must submit their external auditor’s preliminary conclusions or draft report within a specified period.
  • Public Disclosure: Audited balance sheet and profit and loss statement must be published in a local newspaper within four months of each financial year.
  • Financial Information Submission: Institutions must provide the Central Bank with information on their financial condition, including capital adequacy and asset quality.

Restrictions on Lending and Activities

  • Loan Limitations: No loans exceeding 25% of total capital to a single borrower or group of borrowers controlled by the same person.
  • Share-based Lending: Institutions are prohibited from lending against their own shares.
  • Advances to Directors: Advances to directors are only allowed on substantially the same terms as for the general public.
  • Dealing in Goods: Institutions can only deal in goods in connection with realizing security.
  • Ownership Restrictions: Institutions are not allowed to own more than 10% of the share capital of any commercial undertaking.

Central Bank Powers and Immunity

  • On-site Examinations: The Central Bank has been empowered to conduct on-site examinations of financial institutions and their subsidiaries.
  • Information Requests: The Central Bank can require institutions to provide additional information or reports on their operations.
  • Auditor Immunity: No civil, criminal, or disciplinary proceedings can be brought against auditors for reporting information in good faith to the Central Bank.

These new regulations aim to ensure that Samoa’s financial institutions operate in a safe and sound manner, enhancing stability and transparency within the sector.