Financial Crime World

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

International authorities have recently evaluated Samoa’s efforts to combat money laundering (ML) and terrorist financing (TF), and the results are concerning. While the country has made progress in understanding its ML/TF risks, there is still much work to be done.

Identifying and Mitigating Risks

The evaluation highlighted several areas for improvement. Trust and company service providers (TCSPs) play a crucial role in creating international business companies (IBCs), but:

  • Insufficient information is obtained for TCSPs to effectively implement their ongoing customer due diligence (CDD) and suspicious transaction reporting (STR) obligations.
  • The country’s ability to identify and mitigate actual risks remains a concern.

Supervision and Enforcement

Samoa’s approach to supervision and enforcement is inadequate:

  • There is no comprehensive, risk-based approach to supervision based on a sound understanding of ML/TF risks at institution and sector level.
  • Compliance inspections of domestic financial institutions are infrequent and insufficient.
  • No inspections have commenced for the recently established casino sector.

The country’s Money Laundering Prevention Authority (MLPA) and MLP Task Force provide a good basis for strategic coordination and framework development, but:

  • Effectiveness needs to be improved at both the strategic/policy level and operational level.

International Cooperation

Samoa has demonstrated a strong willingness to provide international assistance and has made significant commitments as a party to several international agreements relating to mutual assistance. However:

  • There have been only a small number of foreign requests for information relating to Samoan IBCs, which indicate possible misuse for ML or associated predicate offenses.

Overall Level of Compliance and Effectiveness

Samoa has significantly increased its overall levels of technical compliance with the Financial Action Task Force (FATF) Standards since its 2006 mutual evaluation. However:

  • Important deficiencies remain in relation to criminalization, confiscation, and cooperation.
  • The country’s level of effectiveness is generally improving in several areas, including confiscation of criminal proceeds, but there are still significant gaps in the use of financial intelligence, ML investigations, and TF prevention measures.

Call to Action

Samoa’s authorities are urged to:

  • Conduct a more comprehensive assessment of its TF risks and those associated with the recently established casino sector.
  • Develop a national AML/CFT strategy and improve the effectiveness of its strategic/policy level and operational level.

The international community will be closely monitoring Samoa’s progress in addressing these issues, which are critical to ensuring the integrity of its financial system and preventing the misuse of its offshore sector.