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American Samoa Tightens Anti-Money Laundering Rules

In an effort to strengthen its financial sector and comply with international standards, American Samoa has introduced new anti-money laundering (AML) rules aimed at combating money laundering and terrorist financing.

Global Effort to Combat Money Laundering

The Financial Stability Forum (FSF) and the Financial Action Task Force (FATF) on Money Laundering have been promoting standards of best practice in financial supervision and anti-money laundering measures, respectively. This global effort is aimed at combating money laundering and stemming the flow of illicit funds.

Review of Offshore Laws

Prior to these initiatives, the government conducted a review of its offshore laws with the assistance of the Commonwealth Secretariat in 1996. The review resulted in significant changes being made to both the Offshore Banking and International Insurance Acts in 1998. Notable among these changes was the introduction of stricter controls on banking and insurance license holders.

Money Laundering Prevention Act 2000

The Money Laundering Prevention Act 2000 is the most notable new legislation resulting from this review. Enacted on June 14, 2000, it is based on the Commonwealth model and encompasses the benchmark Forty Recommendations of the Financial Action Task Force (FATF) on Money Laundering.

Key Provisions

  • The AML regime defines money laundering as engaging in any transaction that involves property which is the proceeds of crime or having reasonable grounds for believing the property represents the proceeds of crime.
  • Penalties for a person guilty of money laundering include imprisonment for up to seven years and/or a fine not exceeding $300,000.
  • The Act sets up a Money Laundering Authority within the Central Bank of Samoa, which is responsible for receiving reports of suspicious transactions from financial institutions and referring them for investigation by the competent authority.

Mandatory Obligations on Financial Institutions

  • Financial institutions are required to:
    • Keep business transaction records for seven years
    • Develop policies to combat money laundering
    • Comply with guidelines issued by the Money Laundering Authority

Currency Reporting and Secrecy Obligations

  • The legislation overrides secrecy obligations in any enactment if there is a money laundering investigation.
  • It also introduces currency reporting at the border and provides that anyone leaving Samoa with more than $3,000 in cash or negotiable bearer instruments without declaring it to the Money Laundering Authority commits an offense under the Act.

Extradition and Mutual Assistance

  • The legislation makes money laundering an offense for the purposes of extradition or rendition of fugitive offenders.
  • It allows for mutual assistance between governments to ensure a legal and administrative framework exists for cross-border investigations into money laundering.

International Cooperation

  • Samoa has endorsed the United Nations Programme Against Money Laundering and joined the Asia Pacific Group (APG) on Money Laundering in June 2000.
  • The jurisdiction recently welcomed the opportunity to be evaluated by the APG and the Offshore Group of Banking Supervisors, viewing such evaluations as a valuable opportunity to obtain an independent assessment of the performance of regulators in the financial sector.

Maintaining Reputation

This move is consistent with the recognition that the reputation of Samoa as a responsible jurisdiction is to be maintained, hence the need to continually review its operations in light of internationally recognized standards.