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Money Laundering in Samoa: What You Need to Know

In a bid to combat financial crimes, the Central Bank of Samoa has taken steps to prevent money laundering activities in the country. But what exactly is money laundering?

What is Money Laundering?

According to experts, money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activities. This involves transforming “dirty” money from illegal activities into clean money or legitimate assets.

Stages of Money Laundering

There are three stages of money laundering:

• Placement: Putting the dirty money into the financial system, such as opening a bank account.
• Layering: Using multiple transactions to hide the true origin of the funds, often by splitting the money and moving it through various accounts in different locations.
• Integration: The final stage, where the laundered money is mingled with legitimate money and assets.

Risks of Money Laundering

Money laundering poses significant risks to Samoa’s economy and society, including:

• Undermining economic stability
• Damaging the reputation of the financial sector
• Compromising the country’s ability to prevent large-scale corruption

Measures to Prevent Money Laundering

To combat these threats, Samoa has implemented measures to prevent money laundering. The Money Laundering Prevention Act is administered by the Central Bank of Samoa, with the Governor serving as the Money Laundering Prevention Authority. The authority works closely with government agencies, departments, and the Financial Intelligence Unit (FIU) to implement effective anti-money laundering strategies.

Border Currency Report

One key measure is the border currency report, which requires individuals leaving or entering Samoa to declare cash or negotiable bearer instruments worth $20,000 or more. Failure to comply can result in fines of up to $10,000 and five years in jail.

Anti-Money Laundering Regulations for Financial Institutions

Financial institutions are also under obligation to comply with anti-money laundering regulations, including:

• Keeping records for at least five years
• Developing clear customer acceptance policies
• Properly identifying customers
• Establishing procedures for verifying new customers

Emphasis on Preventing Money Laundering

The Central Bank of Samoa has reiterated the importance of preventing money laundering, emphasizing that it is a critical step in maintaining the stability and integrity of the country’s financial system.