Financial Crime World

Samoan Anti-Money Laundering Regime Under Scrutiny

A recent assessment has highlighted several concerns regarding Samoa’s efforts to combat money laundering and terrorist financing. The National Risk Assessment (NRA) found that the country’s private sector was engaged in undertaking necessary risk assessments, but only provided general feedback without sharing findings with financial institutions or designated non-financial businesses and professions.

Concerns Identified

  • Samoa has not implemented a comprehensive, risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing.
  • The country lacks a robust approach, raising concerns about its vulnerability to these threats.
  • Monitoring of anti-money laundering and combating the financing of terrorism (AML/CFT) compliance has not fully extended to requirements for financial institutions and designated non-financial businesses and professions to assess risk and implement measures for risk mitigation.

Potential Exemptions

  • The NRA identified a potential exemption of trustee companies providing offshore financial services from certain obligations under the Money Laundering Prevention Act 2007.
  • While only one limited exemption has been granted in practice, this broad exemption was not based on a proven low risk and suggests that the risk in the offshore sector is high.

Action Items

To address these concerns, several action items have been identified:

  • Provide feedback on findings from NRA to financial institutions or designated non-financial businesses and professions.
  • Implement a comprehensive, risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing.
  • Strengthen the legal framework to support targeted financial sanctions.

The NRA 2014 and APG/FATF Mutual Evaluation have identified areas in Samoa’s legislation that can be tightened to improve the robustness of its AML/CTF system. This includes amending:

  • The International Companies Act 1988
  • Trusts Act 2014
  • Companies Act 2001
  • MLP Act 2007
  • MLP Regulations 2009

Action items have been identified to commence a process to document legislative improvements required and pursue a process of legislative reform.

Notable Concerns

  • The range of sanctions applicable to financial institutions and designated non-financial businesses and professions, which rely largely on criminal sanctions under the MLP Act 2007, is not considered proportionate and dissuasive.