Samoa Fails to Meet Key AML/CFT Compliance Requirements

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A recent evaluation by the Financial Action Task Force (FATF) has revealed that Samoa has failed to fully implement key anti-money laundering (AML) and combating the financing of terrorism (CFT) compliance requirements.

Rating and Areas of Concern

The country received a rating of “partially compliant” in 13 out of 40 areas assessed, highlighting significant gaps in its AML/CFT regime. The weaknesses identified by the FATF include:

• Inadequate risk assessment and application of a risk-based approach
• Insufficient national cooperation and coordination between law enforcement agencies
• Limited confiscation and provisional measures to combat money laundering and terrorist financing
• Failure to effectively target financial sanctions related to terrorism and proliferation
• Lack of sufficient customer due diligence procedures for non-profit organizations

Additional Concerns

Samoa’s weaknesses also include:

• Financial institution secrecy laws deemed insufficient
• Record-keeping requirements not fully compliant with international standards
• Struggle to rely on third-party services
• Internal controls and foreign branches and subsidiaries did not meet expectations

Positives and Areas of Strength

On the positive side, Samoa received high marks for its efforts to regulate and supervise financial institutions, as well as its financial intelligence unit and law enforcement powers.

Implications and Next Steps

The FATF evaluation has significant implications for Samoa’s banking sector, as correspondent banks may be reluctant to do business with a country that is deemed partially compliant. The government will need to take swift action to address these weaknesses and bring its AML/CFT regime in line with international standards.

Guidance for Financial Institutions

In the meantime, financial institutions operating in Samoa should be aware of the potential risks associated with doing business in the country and take steps to mitigate those risks. This may include:

• Conducting thorough due diligence on clients and transactions
• Implementing robust risk management and compliance procedures
• Monitoring and reporting suspicious activities
• Ensuring adequate training for employees on AML/CFT requirements