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Samoa’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Under Scrutiny

A recent evaluation has highlighted concerns over Samoa’s ability to effectively identify and mitigate money laundering (ML) and terrorist financing (TF) risks. While the country has made significant improvements in its technical compliance with international standards, there are still areas of concern that need attention.

Insufficient Identification of ML/TF Risks

The report found that trust and company service providers (TCSPs), which play a crucial role in the financial sector, lack sufficient information to effectively implement their ongoing customer due diligence (CDD) and suspicious transaction reporting (STR) obligations. Although TCSPs are generally effective in obtaining beneficial ownership information when creating international business companies (IBCs), this information is only updated annually.

Inadequate Supervision

Samoa’s financial supervision has been criticized for being inadequate, with a lack of resources hindering the frequency and intensity of compliance inspections. The country’s focus on higher-risk sectors such as banks and remittance services has also meant that other areas, including the recently established casino sector, have not received sufficient attention.

International Cooperation

Despite these concerns, Samoa has demonstrated a strong willingness to provide international assistance and has made significant commitments under various international agreements. However, the country’s small size and limited resources continue to pose challenges in its ability to effectively address ML/TF risks.

Areas for Improvement

The report identifies several areas that require improvement:

• Strengthening controls to prevent misuse of legal persons and arrangements.
• Improving the frequency and intensity of compliance inspections.
• Enhancing financial intelligence and using it more effectively in ML investigations.
• Developing a national anti-money laundering (AML) and counter-terrorist financing (CFT) strategy.
• Addressing proliferation financing issues.

Conclusion

While Samoa has made significant progress in its AML/CFT efforts, there is still much work to be done to ensure the country’s financial system remains resilient to ML/TF threats. The government must prioritize these areas for improvement and continue to collaborate with international partners to effectively address these risks.